The Home Depot, the world's largest home improvement retailer, based in Atlanta, is exiting its EXPO business. The company also said it is streamlining its support functions, which call for the layoff of 7,000 sales associates, or approximately two percent of the company's total workforce.
The EXPO business has not performed well financially, and is not expected to, anytime soon, according to a company statement. Even during the recent housing boom, it was not a strong business. It has weakened significantly as the demand for big ticket design and decor projects has declined in the current economic environment. Continuing this business would divert focus and resources from the company's core "orange box" stores.
By the end of this month, the company will have shuttered 34 EXPO Design Center stores, five YardBIRDS stores, two Design Center stores and a bath remodeling business known as HD Bath, with seven locations. These steps will impact approximately 5,000 associates in those locations, their support functions and their distribution centers. "Exiting our EXPO business is a difficult decision, particularly given the hard work and dedication of our associates in that business and the support of our loyal customers," said Frank Blake, chairman and CEO. "At the same time, it is a necessary decision that will strengthen our core Home Depot business."
The restructuring of support functions is designed to better align the company's cost structure with the current economic environment. This includes continuing its shift to a region and district based support model in various field functions, and reducing headcount in administrative functions in the retailer's store support centers. These support reductions will impact approximately 2,000 associates and will result in a 10 percent reduction in the company's officer ranks. They will not impact any customer facing positions in Home Depot stores.
At the same time, Home Depot is initiating a salary freeze among all officers. It will continue to offer merit increases to non officer associates, as well as earned bonuses and the company's existing 401k matching contribution for all associates, including officers. The Company will offer severance, earned bonuses and other benefits to all impacted associates.
"We're very fortunate that the soundness of our company lets us live our value of taking care of our people, even in this time of unprecedented economic hardship," Blake said. "These changes will make us a stronger company and will allow us to continue to grow associate employment over the long term to benefit our customers."
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