PacSun Cuts 57 Positions

mike lewis

• February 02 2009
• 404 views
• 2 comments

Pacific Sunwear of California Inc. plans to cut 57 positions from its headquarters and field management staff in an effort to reduce costs. This represents about 11 percent of the management team.

According to bizjournals.com

The company will incur pre-tax severance charges of approximately $1.5 million during the fourth quarter in connection with the cuts.

“We are very disappointed to announce the workforce reductions, but believe we must be prudent in managing our costs and strengthening our balance sheet and liquidity as we meet head-on the unprecedented conditions that the retail industry is currently facing,” Sally Frame Kasaks, PacSun chairman and chief executive officer, said in a statement.

The cuts are a part of a series of cost-reduction measures for the company. Other steps being taken include:

• The reduction of planned inventory levels by at least 20 percent throughout the year, thereby significantly reducing the amount of cash that will be invested in inventory at any one point in time.
• The reduction of planned capital expenditures to not more than $30 million for the year, a reduction of over $50 million from the fiscal 2008 level.
• The reduction of planned selling, general and administrative expenses on a GAAP-basis by approximately $35 million versus the fiscal 2008 level.