Staples lays off hundreds amid merger rumours

January 26, 2016

The office retailer also announced leadership changes, with some rumours suggesting it might drop the Office Depot merger.

In a press release, Staples commented that the cuts to senior management would help create “a more efficient, focused organisation”, with Demos Parneros resigning as President of North American Stores and Online effective 31 March. Shira Goodman, currently President of North American Commercial, has been named President of North American Operations, taking responsibility for B2B, online and retail operations.

Additionally, former President of Staples Europe John Wilson has been named President of International Operations and Transformation, focusing on Europe, Australia, New Zealand, Latin America and Asia and responsible for Staples’ “strategy and overall transformation efforts”. Finally, Otis Pannell, former Senior Vice President of US Retail Operations, will report to Goodman and have “responsibility for retail operations” in the US market.

Fortune added that hundreds had lost their jobs in the corporate structure, with sources commenting that “it was a bloodbath” as “pink slips were handed to both senior and junior employees”. Bloomberg meanwhile reported that Staples “may need to compete without its proposed Office Depot merger” and “go without”, calling it a “beleaguered deal that hasn’t won antitrust approval”.

The Federal Trade Commission filed a lawsuit last year to block the$6.3 billion (€5.8 billion) merger, with the suit seeing the companies offer to divest $1.25 billion (€1.14 billion) of commercial contracts in exchange for approval. This was rejected by the FTC, leaving Staples to call it “misguided”, and was an upgrade from a previous offer of $600 million (€558 million).

Both companies extended their merger agreement to May previously in January in light of the court case, after new developments earlier in 2016 suggested “renewed optimism” in the merger being granted, but sources recently stated “the odds of a settlement are near zero”. Staples is also reportedly facing the threat of loans being withdrawn.

The two companies previously called the decision to block their merger “flawed”, with a court case likely in March, while the European Commission is also investigating the deal, setting the deadline of 16 March for a decision, and it has already been approved in Australia, New Zealand and China.

Ron Sargent, CEO and Chairman of Staples, commented: “We are streamlining the organisation and building a simplified structure that will speed decision-making and enable us to focus on driving profitable growth. These changes will help us compete in a rapidly evolving marketplace, either as a standalone company or in combination with Office Depot.

“John, Shira and Otis have deep knowledge of Staples, and I’m very excited to work with them in their new roles as we position Staples for the future. I want to thank Demos for all he has done to help build Staples. Over nearly 30 years, he has played a significant role in making Staples the leader in our industry, touching countless people and developing many of our strongest leaders and associates. I will miss working with him as a valued colleague.”

Categories : World Focus

Tags : Business Staples USA