Fingerhut Cos.’ chief operating officer and co-president John Buck has resigned in the wake of Federated Department Stores’ decision to downsize the catalog company.
Fingerhut said Friday it plans to slash 550 positions, or 24% of its work force — a move expected to save the company $40 million annually.
Management restructuring will be led by president Michael Sherman, who formerly served as co-president and chief marketing officer.
“It’s a difficult time for the company,” said Steve Leighton, vice president of marketing services and chief privacy officer for direct marketing division Federated Direct. “I’ve been through it before with them and I believe we’ll come out stronger.”
Sherman said Fingerhut will deliver a smaller catalog to fewer recipients. It will also streamline its Web site, tighten credit standards and reduce inventory.
According to Fingerhut spokesman Ben Saukko, the layoffs affect about 350 people in management and administration. The other 200 positions were left unfilled through attrition and a slowdown in hiring in recent weeks in anticipation of the announcement.
Some positions will be eliminated by month’s end; the remainder will go in January. The reductions will be primarily at Fingerhut’s Minnetonka, MN headquarters, the data center in Plymouth, MN and e-commerce operations in Edina, MN.
Fingerhut’s ancillary e-commerce sites will be integrated into Fingerhut.com or discontinued. These include Myjewelry.com, Outdoorspirit. com, Atomicliving.com and Andysauction.com.
The company also said it expects to incur one-time pretax costs of between $75 million and $100 million due to the downsizing.
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