Sears Plans to Cut 21,000 Jobs; 900 in Southland : Retailing: The giant firm says the cuts will help boost its sagging profits.

Sears, Roebuck & Co. launched one of corporate America’s biggest job cutbacks in recent years Thursday, announcing that it will slash about 21,000 office and receiving room positions at its stores across the country.

The cuts, to be completed by mid-year, will include about 900 of Sears’ roughly 15,000 store jobs in Southern California.

Sears, by some measures the nation’s biggest merchant, said in November that beginning this month it would dismiss or reassign thousands of the non-sales employees at its 863 U.S. stores to streamline operations. Until Thursday, however, there was no official word of how many thousands of jobs would be cut by the slumping company, only estimates that the total would fall below 20,000.

The 21,000 hourly and management jobs being eliminated consist of 3,500 full-time and 17,500 part-time positions, or nearly 7% of the company’s retailing work force. Sears’ big financial services subsidiaries, Allstate Insurance and the Dean Witter securities firm, were not affected.

Gordon L. Jones, a spokesman at Sears’ headquarters in Chicago, said the company did not know how many of the 21,000 job cuts would come through dismissals or how many of the affected workers could be transferred into sales jobs or positions that become available at new stores. Sears will have openings later this year in Burbank, for example, when it opens a store there.

Jones said Sears has only recently begun interviewing affected workers to determine the number who are interested in accepting the company’s severance package versus the number who will seek transfers. The company’s full severance package, however, will be offered only to full-time hourly and management employees.

Full-time hourly workers who leave the company will receive one week of pay for every year of service, up to a maximum of 26 weeks’ pay. Management employees will get two weeks of pay for every year of service, up to a maximum of 52 weeks’ pay.

For most part-timers, there will be no severance pay. Jones said part-timers will receive accrued vacation pay and, at their own expense, will be allowed to continue in the company’s health insurance and other benefits programs for one year.

Sears officials, without giving specifics, said the cuts will help boost the company’s sagging profits--which have been hit hard by the overall slowdown in U.S. retailing and Sears’ own image problems. In the third quarter--despite earlier job cuts and cost-cutting efforts--the company’s profit fell 30% to $179.2 million on sales that rose 5.9% to $13.96 billion.

Analysts were skeptical. “It is certainly a step in the right direction, but it’s not enough,” said Kurt Barnard, publisher of the Retail Marketing Report.

Edward Weller, an analyst with Montgomery Securities, said the cutback was a tragedy for the workers involved but long overdue for the company itself.

Barnard noted that Sears’ operating costs--including payroll and administrative expenses--are believed to be the highest among major U.S. retailers. He also said Sears’ key problem is that it has been unable to find a way to bring enough customers back to its stores.

On Thursday, Sears reported that its sales during the crucial retailing month of December were off 0.3% from the same month a year earlier at stores open more than one year. In trading on the New York Stock Exchange, Sears’ stock fell 25 cents to close at $25.625.

Dan Lacey, editor of the Workplace Trends newsletter, ranked Sears’ job cutback as the third-biggest by a U.S. company in recent years. He said the only bigger retrenchments were a 34,000-job cutback by General Motors Corp. last year and American Telephone & Telegraph Co.’s elimination of 31,590 jobs over the last two years.

The next-biggest cutback in retailing, and the fourth-biggest job cut overall, was Ames Department Stores’ elimination of 18,000 jobs last year. That move, however, may have involved more full-time employees and more outright dismissals than Sears’ latest retrenchment.

Jones said Sears’ job cuts result from an effort begun in the fall of 1989 to make its stores more efficient. The program devised by Sears calls for, among other things, the installation of special telephones at the stores so that customers can call customer service and credit departments directly, without having to go through salespeople.

Workers also will be trained in new back office skills to reduce staffing needs. For instance, accounting and credit employees will be trained to fill in for customer service personnel.

In addition, the stores’ receiving rooms will begin recording incoming shipments with electronic scanners. Currently, most of that work is done manually, which requires extra workers.

Times staff writers John Medearis in the San Fernando Valley and Anne Michaud in Orange County contributed to this story.