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Struggling bookseller Borders Group Inc. announced Tuesday it has started laying off 20% of its corporate staff, including 156 at
its headquarters in Ann Arbor, Mich., and 118 people elsewhere, as it looks to
slice $60 million in expenses this year and $120 million annually
beginning in 2009.
Borders cost-cutting plan was announced last week when it released its first-quarter financial results, showing it had narrowed its quarterly loss through prior cost-cutting moves initiated when it began restructuring its business more than a year ago. Nevertheless, the retailer reported that it lost $31.7 million in its fiscal first quarter, which ended May 3.
Earlier this year Borders also lined up $42.5 million in financing to help it continue operations from hedge fund Pershing Square Capital Management LP, its largest shareholder. Richard McGuire, a partner of Pershing Square, was recently elected to the Borders board of directors. Borders is also contemplating other strategic alternatives and in March said it hired J.P. Morgan Securities Inc. and Merrill Lynch & Co. Rival Barnes & Noble Inc., the nation's No. 1 book seller, said last month it had assembled a management team to study the feasibility of a combination with Borders, which is No. 2 in sales. - Donna Block See Dealscape: Next stop for Borders: The auction block? See Dealscape: Ackman could book some buck on Borders sale to Barnes & Noble Categories Deal Video
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