Layoffs at QVC

By JCK Online Staff -- JCK Online, 11/13/2008 3:25:00 PM

QVC, Inc., said Wednesday that it will lay off 900 employees over the next 14 months to support the multi-media retailer’s long-term growth strategy while addressing current business conditions.

The West Chester-based company also said that will add 200 new positions, for a net reduction of approximately 700 positions, or 5.8 percent of QVC's U.S. workforce. These job reductions and other cost-cutting initiatives will result in a $30-$40 million reduction in 2009 forecasted operating costs.

"We remain committed to managing our company for the long term as we navigate this unprecedented economic crisis," said Mike George, QVC's president and chief executive officer. "To ensure we're operating as efficiently as possible, we made difficult decisions to lower our operating costs while taking several steps to invest in our future and better serve our customers."

Key actions include:

* Simplifying management and support structure and streamlining key processes. As a result of these changes, approximately 160 team members were laid off today from the company's U.S. locations. Impacted employees have been offered an enhanced severance package.

* Transforming distribution infrastructure to support long-term growth while continuing to deliver the high level of service QVC's customers have come to expect. This Distribution Transformation program involves:

-- Phasing out most functions of its West Chester distribution center over the next 14 months, other than Jewelry returns processing.

-- Converting its Florence, S.C., distribution center into a state-of-the-art facility for distributing its apparel, accessories, and jewelry products.

-- Shifting the majority of its Home product lines to its Rocky Mount, N.C., and Suffolk, Va., distribution centers.

-- Refocusing its Lancaster, Pa., distribution center on its Health and Beauty product lines while also serving as a centralized returns center for apparel, accessories, health and beauty.

* As a result of these changes, approximately 500 positions in its West Chester, Pa., distribution center will be eliminated over time, and QVC intends to create approximately 200 positions at its Florence Distribution Center. In addition, the company will be shifting the volume to its other distribution centers, which will provide the opportunity for additional work hours for team members.

* Improving customer service efficiency and supporting new work from home models. Customer service changes the company will make over the next year include closing its West Chester, Pa., call center on or about March 27, 2009, resulting in the elimination of approximately 250 jobs. All functions of this center will be redeployed to the company's San Antonio, Texas; Chesapeake, Va.; and Port St. Lucie, Fla., call centers, which will provide the opportunity for additional work hours for team members. The company will also be expanding its home representative program, which enables team members to work some shifts at home and some shifts in its call centers. QVC expects to have more than 300 representatives in this program by the end of next year.

"I had hoped we could avoid layoffs as we pursued our long-term growth strategies, but after witnessing the continuing deterioration in the economy, I came to the reluctant conclusion that this was not going to be possible," George said. "While we did our best to minimize the number of job reductions today, we lost many valued team members who were instrumental in building our business. We have offered them enhanced severance packages and outplacement services to help with the transition. At the same time, we continue to make investments in the technologies, programs, processes and people necessary to move us forward to becoming the preeminent lifestyle retailer in this new multimedia world."

QVC, Inc., a wholly owned subsidiary of Liberty Media Corporation attributed to the Liberty Interactive Group.