Kmart cuts worker hours to protect jobs | NevadaAppeal.com

Kmart cuts worker hours to protect jobs

by Sally J. Taylor

To preserve jobs, Kmart stores are slashing schedules for individual workers, including those at the Super K in Carson City.

The shift in status from full-time to part-time is hurting employee benefits as well as workers’ income.

“Stores are shifting to more part-time hours,” said Kmart Corp. spokeswoman Susan Denis. “Coverage is still there, but the shift is going more to part-time workers.

“Certainly that affects benefits. But what we’re trying to do is preserve jobs overall. And to give greater flexibility (to stores) to have more part-time workers.”

The hour cutbacks come during back-to-school shopping, which is normally a healthy time for retailers.

Kmart Corp.’s chief restructuring officer Ron Hutchison announced in July the retailer would begin laying off store employees to “align” staffing with sales levels. The announcement followed a net loss of $137 million in June.

Recommended Stories For You

Store workers are not the only Kmart employees being impacted by the cuts. Many corporate employees are receiving pink slips this month.

According to Denis, 400 employees at the corporate office in Troy, Mich., are being laid off, plus 100 corporate employees nationwide and 50 field positions such as real estate representatives. In addition, 130 contractors are being phased out.

The cutbacks are the result of the retail giant’s efforts to survive after filing for bankruptcy protection in January following weak holiday sales. Kmart has until Feb. 28, 2003, to reorganize itself into a viable business.

During reorganization thus far, Kmart has closed 283 stores and laid off 22,000 workers, leaving the company with 1,800 stores nationwide and 220,000 workers.

“There will be no additional closures this year,” Denis said. “I don’t know if that will be reevaluated after the new year.”

About 30 percent of yearly revenue is generated in the fourth-quarter’s holiday-shopping season. Officials hope a healthy shopping season this year will give the company a boost out of bankruptcy.

In addition to its bankruptcy troubles, former Kmart executives are under investigation regarding such issues as loans and perks and the possibility that company funds have been misused.

The U.S. Attorney’s Office impaneled a grand jury in Detroit earlier this month to investigate the actions of former Kmart Chairman Charles Conaway and former President Mark Schwartz in the months leading up to the company’s bankruptcy filing.

The actions of the former executives are also being examined by the U.S. Securities and Exchange Department, the FBI and an internal probe by Kmart.

All is not bad news. Kmart stocks have been on a ragged climb the past week. Wednesday, Kmart closed up 8 cents at 72 cents a share. A week ago, it closed below 50 cents.