Sears Announces 100 Layoffs At Headquarters (NASDAQ: SHLD)
Sears has announced that it has laid off 100 workers at its headquarters located outside of Chicago, Illinois in Hoffman Estates. Sears Holding Corp. spokesman Chris Brathwaite said the layoffs took effect immediately. He said the job cuts did not violate the terms of a $150 million tax credit for Sears approved by the Illinois Legislature and Gov. Pat Quinn in December.
The Sears spokesman also said that the headquarters workforce would remain above the job levels required in the legislation even with the announced layoffs. Brathwaite said in a statement, “We are well above the minimum headcount requirements for both the existing legislation expiring in the fall and the new legislation which takes effect in 2013. It’s important to know that under the legislation if we don’t meet our obligations we receive no benefits.” There are now about 6,100 people working at the Hoffman Estates site; the deal requires the company to maintain at least 4,250 jobs there.
The layoff announcement comes two months after the company received a tax credit from the state for agreeing to keep its headquarters in the state. The tax credit was approved after the company threatened to move its headquarters out of Illinois. Sears said last year it was considering leaving Illinois and several states, notably Ohio, worked hard to lure the company away.
In December, Gov. Quinn signed legislation granting the company hundreds of millions of dollars in tax breaks and incentives, while lawmakers also passed a bill that included tax breaks for individuals, including the working poor. Quinn spokeswoman Brooke Anderson said, “We’re not happy with this news today. We’re not happy when any corporation cuts jobs. But the bottom line is that the package protected 6,000 jobs and staved off job losses that would have been much, much worse.”
The announcement triggered criticism of the deal and the lawmakers who passed it from opponents. State Rep. Jack Franks said he wasn’t surprised by the layoffs. He said, “The way the agreement was structured, it gave Sears an incentive to fire tax-paying Illinoisans,” and that the layoffs show that “we have weak political leadership that capitulated to blackmail.” He was a vocal critic of the tax credit from the beginning.