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In the latest in the string of grim news coming from retailers across the nation, Home Depot has announced that 7,000 jobs will be cut and four dozen stores closed. The cuts constitute 2% of its total workforce, and the shut-downs involve the company's high-end EXPO stores, YardBIRDS stores, Design Center stores, and a bath remodeling business known as HD Bath.
CNN Money quoted a statement by Home Depot's CEO:
"Exiting our EXPO business is a difficult decision, particularly given the hard work and dedication of our associates in that business and the support of our loyal customers," Home Depot CEO Frank Blake said in a statement. "At the same time, it is a necessary decision that will strengthen our core Home Depot business."
Many other retailers are facing similar struggles during the recession. Of note, Circuit City announced the closure of all its stores as its bankruptcy turned to liquidation and last week high-end kitchen and home retailer Williams-Sonoma announced job cuts.
The chief investment officer with McQueen, Ball & Associates commented on the perspective of companies these days:
"'Home Depot's news really reflects what is going on at corporations. Companies have to cut expenses and focus on where they think consumer spending is going to be,' said Bill Schultz, chief investment officer with McQueen, Ball & Associates...
'We really need a turn in the housing market to turn the situation around for Home Depot, Lowe's and plenty of other retailers,' he said. 'These retailers can't really control sales in this environment. So they have to cut back on expenses.'"
Unfortunately for the labor market, "expenses" often ends up meaning "jobs" when it comes to saving cash for companies. Joe Biden commented yesterday that the economy is "going to get worse before it gets better", but the unanswered questions likely on people's mind are just how much worse will it get, and how long before it gets better?