Bed Bath & Beyond Update: Retailer Lays Off 7 Percent, Eliminates COO Position

As part of its restructuring effort, Bed Bath & Beyond (BBYB) has announced that it will reduce the staff at its corporate headquarters in Union, New Jersey as well as other select locations. The company has also eliminated the role of president and chief operating officer with the departure of Eugene A. Castagna.

Bed Bath & Beyond said it will reduce approximately 7 percent of its corporate staff, which will include presidents, directors, managers, and other professional staff. The employees will receive severance pay and other company support to help the job transition, Bed Bath & Beyond said.

The move by the company is part of its initiative to reduce its cost structure, which it said it will continue to identify any “additional cost saving opportunities.” Bed Bath & Beyond anticipates a future annual pre-tax net savings of about $30.7 million based on the layoffs. For 2019, it said it expects to see about $18.9 million in pre-tax net savings.

Bed Bath & Beyond will also incur about $12 million in pre-tax cash restructuring charges for fiscal 2019. The company expects its fiscal 2019-year net earnings per diluted share to be at the low end of $2.11 to $2.20. It also said that it does expect to see a gradual improvement of its quarterly net earnings in the second half of the fiscal year.

"As we reset our approach to the business transformation underway, we are executing against 4 key near-term priorities including resetting the cost structure,” Mary A. Winston, interim CEO, and member of the Board of Directors at Bed Bath & Beyond said in a statement.

“While decisions that impact our staff are difficult, today's action is an important step in simplifying our corporate structure and ensuring our resources are aligned with the business we are managing today. We remain confident in the underlying business and our ability to leverage the strength of the Bed Bath & Beyond brand and our lasting connection with customers to deliver on our near-term priorities and transform the Company.”

Shares of Bed Bath & Beyond stock were up 0.33 percent as of 10:05 p.m. ET on Wednesday.