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Sears Canada to cut 1,628 jobs as it outsources, restructures

A sign announces a closing-down sale at Sears Canada’s flagship Toronto store in the Eaton Centre.

Frank Gunn/THE CANADIAN PRESS

Sears Canada Inc. is cutting another 1,628 jobs after having reduced its work force last year by almost the same number as the retailer tries to bolster its struggling operations.

The company said late Wednesday it will outsource jobs in three call centres to IBM, in a cost-cutting move that will affect 1,345 employees over the next nine months. In addition, it said it will immediately let go 283 employees at four logistics centres in Calgary, Montreal, Belleville, Ont. and Vaughan, Ont.

The cuts will leave Sears with just over 20,000 staff, down from about 24,000 a year ago and 31,000 two years ago as the retailer finds new ways to operate more efficiently, spokesman Vincent Power said.

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"We are planning for the future of Sears Canada and taking steps now that will allow us to continue serving customers as a viable national retailer," Doug Campbell, who took over as chief executive officer at Sears last fall, said in a statement.

Sears is feeling the pressure to shrink its staff and close stores in an increasingly intense retail landscape. But even after having sold back leases of some of its most high-profile stores to landlords and laying off employees, it struggled over the crucial holiday shopping season to shore up business.

Last week, Sears said its Canadian sales at stores open a year or more dropped 4.4 per cent in the period from Nov. 3, 2013 to Jan. 6. Those sales are a key retail measure that strips away the impact of recently opened or closed stores.

U.S. parent Sears Holdings Corp. said it expects an adjusted fourth-quarter loss of between $213-million (U.S.) and $316-million, or $2.01 to $2.98 per share. For the year, it sees an adjusted loss between $811-million and $914-million, or $7.64 to $8.61 per share.

Two analysts surveyed by FactSet had projected a profit of 38 cents per share for the fourth quarter and a loss of $6.80 for the year, on average. Sears Canada will report its full fourth quarter results on Feb. 26, when it is expected to provide details of the financial effects of the latest cuts.

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About the Author
Retailing Reporter

Marina Strauss covers retailing for The Globe and Mail's Report on Business. She follows a wide range of topics in the sector, from the fallout of foreign retailers invading Canada to how a merchant such as the Swedish Ikea gets its mojo. She has probed the rise and fall (and revival efforts) of Loblaw Cos., Hudson's Bay and others. More

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