Office Depot closing stores, laying off 13,000 workers
Office Depot announced a restructuring plan Friday that includes closing stores and laying off about 13,100 employees by 2023, according to the company's SEC filings.
The company estimates that its restructuring plan will be "substantially completed" by 2023. Office Depot expects to save $860 million by the end of 2023 and sustain charges of about $543 million, according to the filings.
"Office Depot, Inc. recently announced a restructuring plan to realign our operational focus to support our 'business-to-business' solutions and IT services business units and improve costs," a spokesperson told FOX Business. "Implementation of the restructuring plan is expected to be substantially completed by the end of 2023 and may potentially include retail store and distribution facility closures and headcount reductions."
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The restructuring plan includes the "the reduction of approximately 13,100 employee positions by the end of 2023." The company is still evaluating the number of store locations and distribution facilities it could close.
The company announced $1.7 billion in available liquidity and its highest net cash position in two years in its earnings report for the first quarter of 2020.
"While significant challenges remain ahead, we are in a strong financial position and remain focused on utilizing our B2B platform to provide essential products and services necessary to help our customers and the nation weather through this pandemic," Office Depot CEO Gerry Smith said in a May 6 statement. "We have an extremely strong balance sheet that has been further enhanced by refinancing our credit facility and paying off our term loan, which preserves cash and extends our credit facility maturity to 2025."
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He added the company has "a global sourcing and supply chain network capable of delivering essential products including personal protective equipment (PPE) ... business support capabilities enabling enterprises and individuals to work from home and learn from home," and a business model that has significant variable cost flexibility."