The moves, which are expected to generate approximately $40 million in annualized pre-tax savings, are being implemented in response to the “challenging economic environment.”
According to a press release , the details are as follows:
- Reducing workforce by approximately 95 positions (including positions that are currently unfilled) primarily in the New York offices and support functions in the field and distribution centers. This represented an approximate 10% reduction in staffing for the departments included, while the affected associates have been offered severance and related transition assistance.
- Suspending the 401(k) Plan Company matching contributions through the balance of 2009.
- Eliminating 2009 merit based wage increases for the entire workforce.
The company said it had also initiated other company-wide cost reduction programs “to produce efficiencies in areas such as supply chain, store operations, real estate, catalog circulation, and other general savings in the New York offices.”
The week’s match cutting announcements included U.S. Steel (see U.S. Steel Announces Match Suspension and Coca-Cola Bottling (see Coca-Cola Bottling Caps Match ). Earlier this year clothing retailer Eddie Bauer also announced that it was suspending its current year matching contribution (see Eddie Bauer Suspends Match ).
Among other firms that have decided to suspend their 2009 matching contributions, are Sears (see Sears Suspends 401(k) Match in Face of Declining Sales ), the Denver Post ( Denver Post Latest to Suspend 401(k) Match ), Unisys ( Unisys Cuts 401(k) Match, Slices 1,300 Jobs ), Starbucks (see Starbucks to Exercise Discretion in 401(k) Matching ), Motorola (see Motorola Freezes DB Plan; Suspends 401(k) Match ), 7-Eleven , and FedEx (see FedEx Suspends Match, Cuts Pay ).
More recently, the trend has shown up in the newspaper industry (see Indiana Newspaper Axes 401(k) Match , Louisiana’s The Advocate Announces Match Suspension , Another Media Company Takes 401(k) Match Suspension Route ) and tourism/resorts (see Wynn Resorts Calls Off 401(k) Match , Mohegan Sun Casino Stops Match, Cuts Pay , More Companies Decide to Go “Matchless” ).
However most plan sponsors responding to a PLANSPONSOR survey said they had no plans to change their 401(k) match program (see SURVEY SAYS: What Are Your Plans for Your Match? ) – a sentiment echoed in a recent employer survey by Mercer (see 83% of Employers Surveyed do not Expect Employer Contribution Changes ).
Among employers that have not only not reduced – but have actually moved in the opposite direction – are Dollar Thrifty Automotive Group, Inc., which reinstated its match after a suspension (see Dollar Says Reinstating Match is the “Right Thing to Do” ), and Louisville, Kentucky-based Republic Bank (see KY Bank Ups its 401(k) Match ).
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