Borders Makes Cuts
Borders announced on June 3 “a corporate payroll reduction that includes the elimination of 156 corporate positions spread across virtually all departments of its Ann Arbor headquarters. Employees at the company’s headquarters were informed of the job eliminations this morning. In addition, Borders Group has eliminated 118 corporate posts that are based outside its headquarters, impacting primarily corporate employees in distribution centers, the field marketing organization, and the corporate sales division. These employees were informed yesterday.”
The employee cuts were almost entirely corporate employees, reducing corporate staff by 20 percent. The company called the reductions part of “an aggressive plan to reduce annual expenses by $120 million” and added they “expect to save half of that amount yet this fiscal year.”
Later that week, it was announced that Borders has reached an agreement to sell its Australian, New Zealand, and Singapore storesto A&R Whitcoulls in a deal that could be worth as much as $104 million. Earlier this year, talks between the two companies broke off at the last minute over what is believed to have been the terms of the deal. Under the new agreement, Borders will receive $90 million upon the closing of the transaction and another $14 million if certain performance targets are met.