Fingerhut to Undergo Significant Downsizing
Federated Department Stores Inc., Cincinnati, plans to significantly downsize its Fingerhut catalog operations, slashing 550 positions, or 24% of its workforce, a move expected to save the company $40 million annually.
The company said in a statement that it would deliver a smaller catalog with significantly fewer mailings. It will also streamline its Web site, tighten credit standards and reduce inventory.
Management will also be restructured under president Michael Sherman.
Ben Saukko, a spokesman for Fingerhut, told DIRECT Newsline today that the layoffs affect about 350 people. The other 200 positions had been left vacant through attrition and a slowdown in hiring in recent weeks in anticipation of this announcement.
Some positions will be eliminated by month’s end with the remainder coming in January. The reductions will be primarily at Fingerhut’s headquarters in Minnetonka, MN, its data center in Plymouth, MN and its e-commerce operation in Edina, MN, the company said.
The job cuts will cross all functional areas. Those losing jobs will be eligible for separation packages that include severance pay, career transition services and a two-month continuation of medical benefits. Fingerhut employees about 2,300 people.
Fingerhut’s ancillary e-commerce sites will either 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, pre-tax costs of between $75 million and $100 million because of the downsizing. It will also take a non-cash write down of goodwill and other assets that will total about $740 million on a pre-tax basis for the third quarter ending Oct. 28.
