Over 1,000 lost jobs at Staples, says company
Staples Inc. executives laid off more than 1,000 employees between November and January, acknowledging the job losses for the first time as the company vigorously pursues a merger with its rival, Office Depot Inc.
Staples executives disclosed the layoffs in a conference call with analysts Friday after the company released earnings. A spokesman said the company did not track where the layoffs occurred, but current and former employees said in January that hundreds lost jobs at the Framingham headquarters.
In the call, Staples’ chief executive, Ronald Sargent, told analysts that the company would fight the Federal Trade Commission’s efforts to block the Office Depot deal. The proposed merger would not result in “higher prices for sticky notes,” he said, calling the FTC’s opposition to the merger flawed and evidence of its “deep misunderstanding” of the office supplies marketplace.
“Competition has materially intensified, not lessened,” Sargent said, noting the rise of Amazon.com Inc. and other competitors. “This has been a long and surprisingly frustrating road.”
The Federal Trade Commission late last year sued to block the planned merger on the grounds that it would give Staples and Florida-based Office Depot an unfair advantage in the contract office supply business and result in higher prices.
Regulators have been concerned about corporate contract business; together, Staples and Office Depot control 70 percent of the US market for business customers.
The case will go before a federal judge in Washington on March 21 and a decision is expected on May 10, Sargent said.
Oliver Wintermantel, an analyst who follows Staples for Evercore ISI, a New York strategy and investment group, said it was unlikely that Sargent’s more aggressive tone related to the merger will benefit the company as the court date approaches.
“I think the odds for the deal to go through after the FTC rejected it are certainly not in Staples’ favor,” he said.
Staples has sought the merger as part of a broader strategy to help revive a flagging business. Sales for the fourth quarter that ended Jan. 31 fell 7 percent to $5.3 billion from $5.65 billion a year earlier. Sales for the year also fell six percent to $21 billion from $22.5 billion in 2014.
The Framingham company pared costs by $550 million in the last two years and closed another 50 retail stores in North America. The company has closed 300 stores since the beginning of 2013. Sargent said he expects profits to grow in 2016.
Sargent said the company would try to expand sales beyond office supplies into areas such as cleaning and backroom supplies, improve its assortment of office and business supplies online, and win more mid-sized business customers.