Office Depot announced it will cut about 13,100 jobs and close some retail stores over the coming four years or so.
The company said the job cuts will be carried out in a move to cut costs and focus on its IT service unit, according to a filing with the U.S. Securities and Exchange Commission.
The restructuring, which will be completed in 2023, will yield up to $680 million in net savings by the end of that year and will incur charges of $543 million.
It’s not clear how many stores will be closed. Distribution facilities will also be closed.
The company said the move is designed “to realign its operational focus to support its ‘business-to-business’ solutions and IT services business units and improve costs.”
The filing also noted that the plan could be impacted by uncertainties surrounding the COVID-19 pandemic.
“Office Depot, Inc. recently announced a restructuring plan to realign our operational focus to support our ‘business-to-business’ solutions and IT services business units and improve costs,” a spokesperson for the office supply company told FOX Business. “Implementation of the restructuring plan is expected to be substantially completed by the end of 2023 and may potentially include retail store and distribution facility closures and headcount reductions.”
The firm also announced it has $1.7 billion in available liquidity and the highest net cash position in two years.
“While significant challenges remain ahead, we are in a strong financial position and remain focused on utilizing our B2B platform to provide essential products and services necessary to help our customers and the nation weather through this pandemic,” Office Depot CEO Gerry Smith said in a May 6 statement. “We have an extremely strong balance sheet that has been further enhanced by refinancing our credit facility and paying off our term loan, which preserves cash and extends our credit facility maturity to 2025.”
Smith told CRN that the company’s business has been impacted during the pandemic.
Smith added that the firm “a global sourcing and supply chain network capable of delivering essential products including personal protective equipment (PPE) … business support capabilities enabling enterprises and individuals to work from home and learn from home.” He’s referring to equipment that is used by some medical staff amid the CCP (Chinese Communist Party) virus pandemic.
Amid the CCP virus pandemic, a number of businesses have been forced to shutter locations—some permanently—and declare bankruptcy as a result of a loss in revenue. Most states have imposed stay-at-home measures in an attempt to curb the spread of the virus.