Borders lays off 136 more Latest job cuts follow 2 years of losses topping $150 million

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Borders lays off 136 more Latest job cuts follow 2 years of losses topping $150 million

The Ann Arbor News
Beleaguered Borders Group Inc. marked another painful milestone in its quest to downsize and cut costs Thursday when it laid off 136 people, including 94 in Ann Arbor.


The changes mean total employment has dwindled at the bookseller's Ann Arbor headquarters on Varsity Drive from 1,300 several years ago to 770 today.

The latest job cuts follow two months of upheaval in the corporate ranks at Borders, which has been struggling to restructure and return to profitability after two straight years of losses topping $150 million. Financial results for 2008 will be released at the end of March.

In January, former chief executive George Jones was ousted and replaced with private equity executive Ron Marshall. A few other executives also were replaced.

Earlier this month, the jobs of six vice presidents and 10 department directors were eliminated. Several people were promoted from within to take over those duties.

Last summer, Borders - the nation's second largest bricks-and-mortar bookseller behind rival Barnes & Noble - laid off 275 employees, including 156 locally, as part of a previously announced plan to trim $120 million in expenses.

"While reducing payroll is never easy and we respect the impact it has on employees and their families, it is one of the necessary steps we must take along with other non-payroll expense reductions to help get this company back on track financially,'' Marshall said in a written statement.

Thursday's job cuts represent 12 percent of Borders' corporate employment base and affected departments ranging from marketing to human resources to sales. Workers whose jobs were eliminated are being offered transition pay, severance and job placement assistance, the company said in a statement.

"It seems like they are trying to avoid bankruptcy and trying to avoid taking the company private,'' said Ken Ahern, an assistant business professor at the University of Michigan's Stephen M. Ross School of Business. "It's not unusual to do all these kinds of changes if things aren't going well.''

On Thursday, Borders' stock (NYSE:BGP) closed up 3 cents to 54 cents a share.

Contact Stefanie Murray at smurray@annarbornews.com or 734-994-6932.