Lowe's Offers Buyouts to Corporate Staff
MOORESVILLE, N.C.-Lowe's has begun a program that offers buyouts to certain corporate staff who wish to leave the company, in an effort to reduce expenses.
According to a Lowe's spokeswoman, the initiative, called "voluntary separation," provides a lump-sum severance payment and other benefits to eligible employees who decide to leave the company. The spokeswoman emphasized that it is strictly a voluntary program, offered to eligible employees in the company's corporate offices here and in Wilkesboro, N.C., along with some corporate employees based in the field.
"Lowe's is striving to achieve its business plan through a combination of initiatives to drive sales, grow gross margin and reduce expenses," the spokeswoman said. "The expense reduction includes a reduction in staff at our corporate offices."
She added that the company has never had a voluntary separation program before. "Depending on the number of people who choose to participate, the voluntary severance program is expected to help reduce the need for possible involuntary reductions," she said. "However, if additional cost reduction is needed, an involuntary reduction in force can be implemented to achieve the cost reduction necessary to meet Lowe's business objectives."
A note on the move prepared by analysts Alan Rifkin, Sam Reid and Helen Pan of Barclays Capital (who spoke with Lowe's management yesterday) said the buyouts are a response to Lowe's recent decisions to scale back on its aggressive store growth and focus on multichannel operations, which require fewer employees at the corporate level. "Although the scale of the buyouts has not been announced, management has said the majority of corporate staff...have received buyout offers," the note said.