Tuesday, August 4, 2020
Aug. 4, 2020

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Nordstrom makes sharp staff cuts as it grapples with pandemic

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Nordstrom is laying off thousands of workers, including a large number from its corporate operations in Seattle, as it copes with pandemic-related losses, according to a former employee and reports in a trade journal.

A Nordstrom spokesperson acknowledged Monday that the Seattle-based retailer is “realigning and reducing our workforce to support our market strategy,” without giving any specifics.

But a veteran Nordstrom worker who had just been laid off from a corporate unit in Seattle said Tuesday the retailer had cut 6,000 jobs nationally in June. The worker’s division lost around 30% of its staff, said the employee, who had been with Nordstrom for more than a decade.

The worker’s account follows a report last week in an industry publication, Sourcing Journal, where unnamed sources said Nordstrom was laying off 20% to 25% of its staff nationally “over the near term.”

That would translate into job losses of between 13,600 and 17,000, based on the company’s 2019 workforce. A company spokesperson declined repeatedly to comment on the figures.

Retail analyst Neil Saunders, of the GlobalData Retail consulting firm, said Monday he was told last week by a source at Nordstrom that more layoffs were likely.

The company has said it is “taking steps across our business to strengthen our financial position,” including closing 19 stores.

Nordstrom declined to say how the job cuts fall on its corporate and store-level operation, but acknowledged that the reductions would include “our corporate support teams.” Salaries have been reduced for many executives, while Pete and Erik Nordstrom and other board members “are not receiving pay for a portion of the year,” the spokesperson said.

The former worker said the layoffs were originally planned for the week of June 1, but were delayed by the downtown demonstrations and looting, which left the flagship store heavily damaged. Staff were informed of the layoffs on June 8th or 9th and the last day was June 19, the worker said.

The layoffs come just weeks after Nordstrom announced that most of its 378 stores, including all 15 Washington locations, would be reopened by the end of June.

They follow months of unprecedented challenges as Nordstrom and other retailers shuttered stores in the face of the pandemic. In May, Nordstrom reported a quarterly loss of $521 million and a 40% decline in sales as the pandemic forced stores to close.

Those dismal results come as the broader retail sector, especially brick-and-mortar department stores, braces for a COVID-19 economy and shoppers who want to conserve cash and avoid public places.

Under those conditions, retailers “don’t need as many associates in stores,” said Camilla Yanushevsky, a retail industry analyst with CFRA.

Although consumer anxieties will fade, analysts worry that many people who shifted to online shopping during the pandemic may never return to brick and mortar.

That assessment was shared by the newly laid-off Nordstrom worker, who noted that the company had been working to shift more of its sales into the online channel on the assumption “that the customer is not coming back quickly to the physical stores.”

That bodes poorly for laid-off workers hoping to eventually be rehired. Yanushevsky said most industry forecasts suggest “that around 40% of 50% [of the layoffs] within the retail industry will be permanent.”

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