Home Depot Inc, the world's largest home improvement chain, is laying off about 1,000 employees, according to an internal memo obtained by Reuters, two days after warehouse club store Sam's Club said it would cut more than 11,000 jobs.

We are restructuring select support functions to better align with our business needs and we are exiting three underperforming pilots, Home Depot CEO Frank Blake said in a memo to employees on Tuesday.

It is the second of two big job cut rounds in the retail sector. Sam's Club, the warehouse club unit of Wal-Mart Stores Inc, announced plans on Sunday to cut about 11,200 jobs, or 10 percent of its workforce.

It is never good news to announce layoffs. The personal hardship that this will cause for many of our associates makes this a very difficult decision. But it is the right and necessary decision for our business, our associates as a whole, and for our shareholders, Blake said.

Home Depot is not cutting jobs because of poor financial performance, Blake told employees.

I want to reiterate that this is not a case of the company cutting expenses in reaction to broader economic pressures or our business performance, he wrote. Rather, we are making prudent structural changes where it makes business sense to consolidate some functions.

The changes follow Home Depot's decision to move to a centralized human resources structure, Blake said. The company is also cutting costs in its real estate and construction functions because it is not building as many new stores.

It has no plans to close stores except for three pilot project locations, Blake said.

The pilots include a smaller store with a more limited selection of products in Wilson, North Carolina; a temporary hurricane recovery outlet in Waveland, Mississippi; and a clearance outlet in Austell, Georgia.

The company will give employees a minimum severance package of 60 days' pay. They also will be eligible for year-end bonus payouts.

Home Depot shares were up 0.5 percent at $27.76.

(Reporting by Dhanya Skariachan, editing by Leslie Gevirtz and Robert MacMillan)

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