Bed Bath & Beyond layoffs follow sales drop in third quarter amid talks of bankruptcy
23 Jan 2023 --- Bed Bath & Beyond’s latest round of layoffs has been announced as the personal care and home amenities giant makes further moves to offset declining sales by cutting costs.
The company has been consulting its advisors to stave off the threat of bankruptcy; however it concedes this option is not off the table.
“As part of our turnaround plan, we are reevaluating all aspects of our enterprise and resetting elements of our foundation,” states the company.
“As our strategic direction changes and we streamline our operations, it is necessary to right-size our organization to ensure we are equipped for the future. Unfortunately, this has necessitated making the difficult decision to say goodbye to some of our colleagues.”
Last August, company executives had reported that the omnichannel retailer was closing stores and slashing around 20% of its corporate and supply chain workforce. A total of 126 stores in the US were named for closure in a list updated on January 10.
Last August, company executives had reported that the omnichannel retailer was slashing around 20% of its corporate and supply chain workforce.“As our strategic direction changes and we streamline our operations, it is necessary to right-size our organization to ensure we are equipped for the future,” a recent company statement reads, without providing further details on the scale of the new layoffs.
Losses mounted as evidenced in the company’s third quarter financials. The retailer’s operating loss rose by more than 423% compared to the same quarter last year, reaching an estimated US$450.9 million, while its net loss grew by 42.2% to reach around US$393 million.
The company reported an operating loss of US$1.14 billion during the first nine months of 2022, burning through its cash reserves that have gone down from US$509.1 million (Q3 2021) to US$153.52 million (Q3 2022).
Sales drop in third quarter
Earlier this month, Bed Bath & Beyond reported net third quarter (ending November 26, 2022) sales of US$1.259 billion, a decline of 33%, predominantly driven by a comparable sales decline of 32%.
The company details it has started cost reductions of about US$80 million to US$100 million across its corporate business, including overhead expenses and headcount.
“At the beginning of the third quarter, we initiated a turnaround plan anchored on serving our loyal customers, following a period when our merchandise and strategy had veered away from their preferences,” remarks Sue Gove, president and CEO at Bed Bath & Beyond.
Gove states that while the company “moved quickly and effectively to change the assortment and other merchandising and marketing strategies,” inventory was constrained and it did not achieve its goals.
“We will continue to rebalance our assortment towards National Brands and refine our Owned Brands mix to reflect the deep understanding of our customer, along with the selection and value only we can offer in the Home and Baby markets. We are actively pursuing higher in-stock levels to meet proven demand.”
The latest round of layoffs also includes the chief transformation officer position currently held by Anu Gupta.
By Benjamin Ferrer
