Lowe Lays Off Thousands Of Work, Move Towards Outsourcing
Lowe, the home improvement retailer told that the company is going to lay off thousands of employees. The elimination comes after the decision to outsource the workers for assembly works and janitorial services. The demand roles will be taken care of by the third party companies.
The almost 100 years company has already notified the assembly and maintenance workers about lay off. Lowe Inc. has almost 1,800 stores in the U.S. and each of them has multiple workers that fall into the category. According to the people familiar, the company is not paying the severance package. However, they’re being offered “transition pay”.
While the workers are being fired, the same people are eligible to pay for the open positions in the company. The North Wilkesboro based company has 190,000 full-time and 110,000 part-time workers as of Feb. 1. “We are moving to third-party assemblers and facility services to allow Lowe’s store associates to spend more time on the sales floor serving customers,” said a spokeswoman at the company.
Lowe has added almost 2,000 jobs for its technology-based center in North Carolina. The workers there will focus on making technology that will help to enhance Lowes logistics capability and supply chain. While CEO Marvin Ellison with its position is trying to restructure the company by shutting down the unprofitable business. He is trying to move on from traditional retail stores to online stores.
After the layoffs announcement, the $78 Billion worth company shares slipped by 2%. Looking at its stock performance, its shares are up by 8% this year. Mr. Ellison was the senior executive at the rival Home Depot and CEO at struggling J.C. Penny Co.
Comparing Home Depot and Lowes, the former has always been on the edge to Lowes. But this quarter, it outpaced the rivals in sales but its profits decline more than expected. It sprawled the company’s share price by 12% that day.
The news was first reported by the Wall Street Journal.