Being a well-known retailer of home improvement and construction products, Home Depot, while enjoying a large customer market share, had to opt for a major employee layoff in 2009. We planned to lay off 7000 employees in the year, with our intention being to close down our smaller home improvement brands.
The market was the victim of a serious crisis, as the recession still continued to have a major negative impact on the housing market of the country. With our shares mounting by 5% in the morning trading segment, we opted for a job cut decision.
The planned layoff was calculated to affect 2% of the workforce hired by us. With 300, 000 employees as per staff records, we were subject to a pretax charge of $532 million by the end of the fourth quarter for the company.
The employees who were laid off mostly worked in the Expo Design Centers, HD baths, YardBIRDS, bath remodeling, and design centers. In combination, these 4 centers had a record of operating about 4 dozen locations each.
Expo never performed financially well, and even during the major housing boom, it failed to reach our set financial goals. Frank Blake, who was our Chairman, shared the financial condition of Expo, and said that in the mounting pressure of the market economy, it was not possible to let Expo continue any longer. Even our most positive aspirations about the performance of Expo in the near future would not have helped us meet our financial goals, which necessitated the closure of the center.
We had no intentions of closing down any of our core stores or downsizing anymore later in the year. We had a clear idea that we had the right number of personnel as per our resources and goals, according to the overall size of our business.
Our layoff included the job cuts of 2000 employees in our non store job segment, which also included the 500 workers who were then employed in corporate headquarters. The salary of the officers was also set to a freeze.
Overall, the 7000 layoffs were done to align the different company segments for better performance and to ensure profit generation from every quarter.