Home Depot to cut 500 jobs at Atlanta HQ
ATLANTA–The Home Depot Inc., the world's largest home improvement store chain, said today it is cutting 500 jobs at its headquarters in part because of market conditions caused by the slowing U.S. economy.
The Atlanta-based company notified the affected employees today, spokesman Ron DeFeo said, adding they will be paid through April 4.
The job cuts represent 10 per cent of the 5,000 employees who work at Home Depot's headquarters. The company has more than 350,000 employees worldwide.
"We're certainly in a tough business environment and we anticipate a tough environment in 2008," DeFeo said. "As we continue our store investment, we needed to make sure we had the appropriate support staffing structure that would allow us to continue our store investment."
DeFeo declined to say how much the job cuts would save the company annually. He also declined to say what types of jobs were being cut, except to say the cuts were across all headquarters functions.
Home Depot's profits have been hampered in recent quarters by the steep downturn in the housing market and the credit crunch facing financial institutions. The company's stock price has dropped more than 30 per cent, on an adjusted basis, in the last 12 months.
Some economists have suggested the housing problems could continue into 2009.
The company said in September that it expects earnings per share from continuing operations to decline seven per cent to nine per cent for fiscal 2007 pay day advance. Home Depot is scheduled to report its fourth-quarter and full-year 2007 results on Feb. 26.
At the end of 2006, Home Depot operated 2,147 stores in the United States, Canada, Mexico and China. In Canada, the company employs more than 27,000 people in a store network in every province.
The U.S. housing market, a major source of sales for Home Depot, has been battered by the subprime credit crunch that has led to a major slump in new house building.
The credit crunch, weakening stock markets and other factors are also dragging down the overall economy, and many observers say the United States may already be in recession.
The worsening U.S. economy is also bad news for Canada, which exports more than two thirds of its manufacturing output to buyers south of the border. Already, weaker demand for everything from lumber and construction materials needed for the slumping homebuilding sector, as well as auto parts and assembled vehicles, has led to job cuts across Canada, particularly at industrial plants in Ontario and Quebec.
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