The digital retailer’s projected job cuts will impact just over 3.5 percent of the company’s 2,000-strong workforce, largely affecting technology positions.
When Saks Fifth Avenue (SFA) parent Hudson’s Bay Co. (HBC) partnered with capital growth investor Insight Partners, the arrangement split up the luxury retailer’s operations, with the e-commerce business (Saks) becoming a standalone firm and retaining ownership of the Saks Fifth Avenue intellectual property and related assets. HBC owns the majority stake in Saks.
Retailers such as Walmart, Gap and H&M began cutting headcount beginning last fall after the sector broadly experienced sales and inventory issues. Across the pond, fast-fashion e-tailer Asos in November began “tough but necessary” job cuts to slash costs.
Adding to the pressures have been underwhelming holiday sales. National Retail Federation (NRF) said Wednesday that November-December 2022 retail sales rose 5.3 percent to $936.3 billion, falling short of its initial projection for 6 to 8 percent year-on-year growth, or $942.2 billion to $960.4 billion. Its forecast included an estimated 10 to 12 percent rise in online sales to between $262.8 billion and $267.6 billion. NRF didn’t adjust for inflation.
Slower holiday sales are now forcing retailers to take a much closer look at operations and where they can cut costs. In addition to Saks, Boohoo Group is said to be finalizing layoffs.
And it isn’t just fashion retail that’s feeling the heat to realign expenditures against a slowing global economy. Amazon’s 18,000 job cuts, Microsoft’s 10,000 and Google 12,000 spell bad news for the consumer spending outlook.
Executives at Saks did not respond to a request for comment.