- Nearly 1,800 retail employees were laid off at four major companies this week, signaling ongoing strife for the industry even as the US unemployment rate reached a 50-year low in 2019.
- While layoffs at Barneys and Kohl’s reflect ongoing challenges for the traditional retail market, woes at Wayfair and Jet Black point to the dangers of e-commerce brands that grow too much, too fast.
- We took a closer look at this week’s rash of layoffs as the retail apocalypse continues.
- Visit Business Insider’s homepage for more stories.
Since Monday, nearly 1,800 total positions were eliminated across four major companies — Jetblack, Wayfair, Kohl’s, and Barneys — in retail. These workers join a growing legion of retail employees who continue to be axed en masse from major companies, despite the US unemployment rate reaching a 50-year low in 2019.
While the challenges plaguing these companies are nuanced, the cuts represent a wide cross section of the issues affecting both traditional retailers and e-commerce companies alike, as they struggle to keep up with the fickle whims of consumers.
“The struggles of Kohl’s, Walmart, and Barneys are exemplary of what many retailers are facing today,” Katrin Zimmermann, managing director of TLGG Consulting, told Business Insider. “There’s a tendency to point towards rising rents and competition from e-commerce players as the source of these struggles, yet there are things all retailers can do to remain competitive in the new decade.”
Though Barneys and Kohl’s represent opposite sides of the traditional retail spectrum — Barneys an iconic luxury department store beloved among celebrities, and Kohl’s the big-box store that became emblematic of the suburban US shopping center — both have failed to adapt to a quickly changing retail landscape.
“Department stores have been struggling for a long time, but they still generate billions of dollars,” Sucharita Kodali, vice president and principal analyst at Forrester, told Business Insider last year. “That’s not going to evaporate overnight, but we’re still seeing this slow chipping away. Sometimes a well-executed program can help stave off the decline. Every quarter they have to pull a rabbit out of a hat.”
Meanwhile, on the e-commerce side, Jet Black and Wayfair represent the dangers of the plucky digital startup that grew too much, too fast. In both cases, these companies made lofty promises that left them incapable of handling high operating costs.
Zimmermann said that for Kohl’s and Wayfair — the two companies in the group still standing — survival will be dependent on refocusing on new target audiences and being smarter about how to integrate tech.
“Technology has been a buzzword in retail for almost a decade now, yet there are still few companies that get it right,” she told Business Insider. “It’s not enough to simply hand out iPads to your employees. Technology is always a means to an end, never an end in itself. The end should always be a more seamless customer experience.”
Here’s a recap of layoffs from this week to bring you up to speed.
