A Discount Retailer Now Confirms Painful Corporate Layoffs

A discount retailer now confirms painful corporate layoffs after announcing the closure of more than 1,000 of its stores nationwide.

Dollar Tree is laying off people in its corporate office in Chesapeake, Virginia, the company confirmed to Retail Dive by email.

Layoffs will occur via both restructuring and reductions, a spokesperson said.

The downsizing is the result of a recently announced “store portfolio optimization,” per the spokesperson.

Earlier this year, the company said it would close 1,000 stores in the coming years, including 600 of its Family Dollar locations during the first six months of this year.

About 50 employees are affected, according to outside news reports; the company didn’t immediately confirm how many are impacted.

They “have been offered support including severance pay, access to COBRA medical coverage, career resources and our Emotional Wellbeing Solutions,” the spokesperson said.

Dollar Tree has been working to overhaul its company structure, with more than a dozen corporate officers arriving less than two years ago.

About a year ago, some 90 people were also laid off at the corporate headquarters.

The discounter posted revenue and comp gains last year, but swung to a $998 million net loss from net income of $1.62 billion the year before.

Much of the problem is due to Family Dollar, whose lower-income customer base has been especially hard hit by higher prices.

In November, the company said it was scrutinizing its underperforming Family Dollar business and warned it could close, rebanner or relocate many of those stores.

As of February 3, the company operates nearly 17,000 stores across 48 states and five Canadian provinces — about half of them Family Dollar stores.

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Also Read: Retirees Will Now Receive More Money For Social Security

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Market News Today - A Discount Retailer Now Confirms Painful Corporate Layoffs.
Market News Today – A Discount Retailer Now Confirms Painful Corporate Layoffs.

Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.

First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.

Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.

That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.

The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.

US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.

Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.

Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.

“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”

Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.

The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.

While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”

Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”

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Also Read: A Giant Company Now Announces Unexpected Layoffs in Virginia

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Market News Today - A Discount Retailer Now Confirms Painful Corporate Layoffs.
Market News Today – A Discount Retailer Now Confirms Painful Corporate Layoffs.

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