Multi-channel retailer Sears Canada, Inc. (SCC.TO) inked Wednesday an outsourcing agreement with third party vendor International Business Machines Corp. (IBM) that will see the company cutting a total of about 1,628 call center and warehouse jobs.
As part of beleaguered retailers bid to slash expenses, it has struck a deal with IBM to outsource the work currently being done by three internal Sears Customer Contact Centers or call centers. This is expected to affect about 1,345 jobs while it is implemented over the next nine months in a seamless manner to customers.
Meanwhile, the outsourcing deal will enable Sears Canada to focus on its core retail business and provide it a great opportunity to maximize the value of the company.
Sears noted that the transfer of work to IBM will provide it with significant capability upgrade that will result in better processes, controls and tracking and an overall improvement in the customer experience.
"The changes we are making to our Customer Contact Centres will allow us to streamline the support structure of our organization while enhancing the overall customer experience. Our partner will bring tools and technologies that will allow us to operate more effectively without the ongoing investment in and maintenance of legacy proprietary systems," Sears Canada President and CEO Doug Campbell said in a statement.
The company will also reduce an additional 283 positions effective immediately as it is initiating a reorganization and simplification of its logistics organization by leveraging tools and technology in order to drive optimal performance that will streamline business processes.
The company added that it will be provide career transition support to those who are leaving Sears to assist obtaining jobs outside of Sears.
"These types of decisions are not made without considerable thought and deliberation. We are planning for the future of Sears Canada and taking steps now that will allow us to continue serving customers as a viable national retailer coast to coast in stores and through our Direct channel now and in the future," Campbell added.
In November, the company had announced a reduction of 712 jobs as part of its effort to implement several changes to improve efficiency, profitability and overall customer experience in its repair services and parts businesses. It also announced an additional staffing reduction of 79 in its head office operation.
Earlier in November, Sears Canada announced a wider loss in its third quarter, reflecting severance and impairment charges, despite a 1.2 percent increase in same store sales. However, the company announced an extraordinary cash dividend.
The company's U.S. parent Sears Holdings Corp. (SHLD) is also expecting to report an adjusted loss in a range of $2.01 to $2.98 per share for the fourth quarter, and adjusted loss of $7.64 to $8.61 per share for the full-year 2013.
SCC.TO closed Wednesday's regular trading session at $12.91, up $0.01 or 0.08% on a volume of 41,742 shares.
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