Sears Will Offer Severance to 600 in Merchandise Unit

Sears, Roebuck & Co., the world’s largest retailer, which has been struggling to revive its sagging fortunes, Friday said it would offer severance packages to at least 600 employees at its troubled merchandise group.

In Chairman Edward A. Brennan’s first major move since personally taking control of the merchandise division last month, Sears said it would consolidate certain corporate and merchandise group staff as part of an ongoing companywide effort to reduce expenses.

Chicago-based Sears employs 525,000 workers, including 350,000 in the merchandise group.

Sears earlier had said the company would offer severance packages to about 2,000 employees in the merchandise group’s legal, human resources, public affairs and planning departments. A spokeswoman later corrected that, saying the affected departments have a total of 2,000 employees, but that not all employees would be offered the package.

Sears said it would offer managers two weeks’ severance pay per year of employment, while non-managers would get one week’s pay per year.

Sears also said it plans to eliminate a layer of management among its six merchandise group categories. Officers in charge of the six areas will now report directly to Laurence Cudmore, president of retailing. They previously reported to two other managers.

The move is the latest in a string of efforts to prop up earnings at Sears’ retailing division. The company has been struggling to come up with a winning marketing formula for the group.