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TROY, Mich. - Bankrupt retailer Kmart Corp. today unveiled a broad cost-cutting plan, including slashing 780 jobs, in an attempt to return to financial health, Reuters reports.
Kmart, which earlier this year announced it would close 283 stores following its Chapter 11 bankruptcy filing in January, said the actions will save it $66 million in fiscal 2002 and $130 million annually.
Under the plan, the company said it will immediately start eliminating about 400 positions at its corporate headquarters in Troy, Mich., and about 50 positions located nationally that provide corporate support. It said it will also cut about 100 current open posts and will begin phasing out about 130 contract positions. Kmart stores and distribution centers will not be affected by the actions.
"This cost reduction initiative is absolutely critical to our reorganization," Chairman and Chief Executive James Adamson said in a statement. "We had no alternative but to take this action, the company continues to take the steps necessary to return to financial health and regain the confidence of its many stakeholders."
In other Kmart news, The Detroit Free-Press reports that Kmart Corp. is unhappy with how Fleming Co. is keeping its stores stocked with food products.
"The Fleming arrangement is one that has a lot of issues we need to work out with Fleming," Al Koch, Kmart's CFO, told the Free Press. "There are a number of areas that need to be improved."
Kmart announced last week that Richard L. (Dick) King of Encore Associates Inc. has joined the company as general merchandise manager, food and consumables, to oversee the food and consumables merchandising at Kmart. King was president and COO at Albertsons from February 1996 through June of 1999.