Sears, Kmart Layoffs 2019: Why The Retail Giant Has Cut Workers, Closed Stores

Transform Co., the parent company of Sears and Kmart, filed a notice in late August that it would lay off roughly 250 corporate employees from its Illinois headquarters beginning in late October. In a statement to USA Today this week, the company said the "filing referenced refers to actions that were taken last week. There is no additional action planned for October.”

While additional layoffs would have been an indication of more trouble for Sears and Kmart, problems continue to linger after emerging from bankruptcy. There will soon be fewer than 100 Kmart locations and fewer than 200 Sears locations.

Why have Sears and Kmart struggled in a sector they once dominated?

Neil Saunders, managing director at GlobalData Retail, told CNN Business that the business model isn't working in a cutthroat environment.

"Sears never really had a credible plan for survival: it has always been about making cuts to help the bottom line, rather than being about how to grow the top line," Saunders said.

Jared Blikre of Yahoo! Finance said the company had been run into the ground by Eddie Lampert, who stepped down as CEO of Sears Holdings in October 2018.

"What's their digital strategy? The fact is, they have basically nothing," Blikre said.

Dan Howley of Yahoo! Finance noted that amid the growth of online retail giant Amazon, customers tended to gravitate to Target over Sears and Kmart. Meanwhile, competitors such as Walmart and Costco have been considered stronger brick-and-mortar options, often offering lower prices and a broader selection.

Many other companies have seen layoffs and store closings. Home improvement retailer Lowe's in early August announced it would lay off thousands of workers, from assemblers to janitors. J. Crew Group in late July announced it would lay off dozens of employees from its New York corporate headquarters.

Transform Co. could be showing signs of life. There have been three stores opened under the brand "Sears Home & Life," which just sells only home goods like appliances and mattresses and therefore not face the same type of challenges against online retailers.