Sears Canada Inc. is laying off close to 800 employees as it reorganizes its repair services and parts business and makes cuts at head office.
The changes over the next six months will affect 712 associates in repair services and 79 at head office, it said in a news release Tuesday.
Sears said it is improving efficiency by shutting its parts processing centre in Belleville, Ont. as well as 16 stand-alone locations across the country. Parts processing will be centralized in Calgary, Toronto and Montreal.
Its Sears repair technicians and support teams will be laid off and the work will shift to Sears-authorized contracted technicians in mid-sized cities, though Sears technicians will continue to do the work in large cities. It also plans to shift repair work to its appliance suppliers.
"The changes we are announcing today are being made to bring the structure of our organization in line with the size of our business," president Doug Campbell said in a statement.
The move comes as the retailer looks for more ways to improve its financial results after having earlier sold several department store leases in the face of heightened competition.
Earlier this month, Sears Canada posted an enlarged net loss of $48.8 million or 48 cents per share — mainly due to severance and restructuring costs. The company said the net loss included $20.2 million for severance, and that filtering out the extra costs it would have reported a profit.
Sears has already closed some of its big city locations in Western Canada and has announced plans to vacate other large stores, including its flagship downtown Toronto location.
The company still has more than 100 stores as well as an online and catalogue business.
Sears Canada shares jumped four per cent to $18.98 on the news.
The retailer's U.S. parent denied rumours yesterday that it was planning to sell its Canadian operations, which have been squeezed by a very competitive retail landscape in Canada.
However, it moved to shift a substantial financial stake out of Canada last week by having Sears Canada pay a dividend that will benefit the parent to the tune of half a billion dollars.
It is also moving to extract value from its real estate assets in Canada, selling off stakes in some regional malls.
Target and Wal-Mart have staked out the discount retail territory in Canada with the disappearance of Zellers and Hudson's Bay Co. is moving upmarket, but Sears has been seen as an awkward in-between, with neither low prices nor high fashion to distinguish it.