TORONTO - Sears Canada Inc. plans to cut more than 1,600 jobs this year as it reorganizes and outsources some of its business, the struggling department store operator said Wednesday.
Sears Canada, controlled by Sears Holdings Corp., said it has signed an agreement with IBM to take over work currently handled internally, a move that affects 1,345 jobs at three Customer Contact Centres over the next nine months.
A further 283 jobs will immediately be cut in a related reorganization of its logistics unit.
The closing of the call centre in Belleville, Ont., affects 527 jobs.
“Belleville will still be our national distribution centre,” company spokesman Vincent Power said.
One Belleville worker, who declined to give her name, said she lost her job suddenly Wednesday morning.
She said she was sitting at her work station when she was called into a private meeting by senior staff.
“They come down and take us one by one and tell us ... 'You're finished',” she said.
“I'm not surprised,” she said. “You go online and what do you see? Fourth quarter; sales down.”
The news comes just days after the U.S. parent company reported a steep 7.4% plunge in sales at established stores during the fourth quarter.
Sales at the parent company have been falling since 2005, when billionaire hedge fund manager Edward Lampert merged Sears and discount chain, Kmart, in an $11 billion deal.
The retailer has closed about 300 U.S. stores since 2010, tightly managing inventory and selling real estate. The Canadian unit has also been shedding assets as it also tries to engineer a turnaround.
In Canada, Sears has lost market share as it faces tough competition from U.S. retailers like Wal-Mart Stores Inc. and now Target, which opened its first Canadian stores last year.
Sears Canada, whose website says it has more than 25,000 associates and operates 181 department stores, said in November it would lay off nearly 800 workers, with 712 jobs cut at its services business and 79 at its head office.
Separately on Wednesday, U.S. luxury department store, Nordstrom Inc, announced it is opening a store in the heart of Canada's largest city, taking over the flagship space at Toronto Eaton Centre soon to be vacated by Sears Canada.
-- with files from QMI Agency