Lowe's preps for layoffs as it shifts to new store staffing model
Home improvement giant Lowe's is changing its store staffing model and will be laying off "less than 1 percent" of its employees in the near future.
(CNBC) - Home improvement giant Lowe's is changing its store staffing model and will be laying off "less than 1 percent" of its employees in the near future, a person familiar with the matter said Thursday.
The source did not share the exact number of layoffs. Lowe's workforce totals more than 285,000.
As part of the reshuffling, Lowe's is shifting the roles and responsibilities for some of its staff and eliminating some jobs, this person said.
Some of the affected workers will be moved to new roles at the company, and others will be promoted. However, a portion will be laid off as Lowe's consolidates some positions, the person explained.
The new staffing model will be implemented nationwide and is aimed at freeing up resources to boost face time with customers as the retailer adapts to evolving customer needs.
In a statement, Lowe's said, "While we have no announcements to share, we continually evaluate our staffing model to ensure we have the resources in place to serve customers' evolving expectations and their home improvement needs."
The layoffs are just the latest to hit the retail landscape. Earlier this week, Wal-Mart said it would be slashing hundreds of jobs with many of the cuts impacting its human resources department. In September, Wal-mart said it would cut 7,000 back-office jobs. Meanwhile last week, The Limited announced it would be closing all of its stores.
In recent calls with investors, Lowe's has stressed its attempts to boost productivity — a goal the new model is aimed at meeting.
As part of its efforts to improve customers' experience, Lowe's is doubling down on its strategy to cater to shoppers both in store and online. In December, the company detailed its plans for about $3.6 billion in capital expenditures from 2017 to 2019. About 45 percent of the spending will go toward this strategy, including new stores and technology investments.
Lowe's also plans to add 15 to 20 stores per year across North America in the next three years. In the U.S., these new stores will result in 4,000 to 5,000 new jobs over the course of this period.
Home improvement retail has been a bright spot for the struggling retail landscape as rising home prices and an improving consumer backdrop have prompted customers to spend more on home improvement projects.
Overall retail though has struggled amid fierce competition from online retailers and cost-cutting measures as companies double down on other initiatives, such as e-commerce.
Same-store sales at Lowe's have been positive for 14 straight quarters — a rare track record for a retailer. Still, the company's growth has lagged that of rival Home Depot's for six of the past eight quarters, according to FactSet data. During the past year, Lowe's shares have fallen 2.5 percent while Home Depot shares have risen 5.9 percent.