Home Depot to lay off 1,000

An internal memo sent to staffers by CEO Frank Blake said about 900 of the cuts stem from consolidating some support functions in its human resources, finance and other divisions.

The rest come from the company closing a small-format pilot store in Wilson, N.C.; a temporary hurricane recovery outlet in Waveland, Miss.; and a clearance outlet in Austell, Ga. Blake said in the memo there were no plans to close any full-size Home Depot stores.

The cuts are less than 1 percent of Home Depot's more than 300,000 workers.

The Wilson store employs 40 people, and officials said inventory would be liquidated over the next six to eight weeks. Managers said they would try to find jobs for the Wilson employees at other area Home Depot stores.

Home Depot spokesman Ron Defeo said as part of the restructuring the company will create 200 jobs in Atlanta, where most human resources administration will be handled, although there will still be a field human resources team.

Home Depot, based in Atlanta, and other home-improvement retailers have faced sales declines from the long-standing construction slowdown and consumers holding back on do-it-yourself projects amid worry over jobs and home values. Although the U.S. housing market is stabilizing after a nearly three-year decline, home prices remain far below their peak.

Home Depot's profit is about even with last year for the first nine months of the fiscal year, a period that ended Nov. 1, while revenue is down about 9 percent.

"This is not a case of the company cutting expenses in reaction to broader economic pressures or our business performance," Blake said in the memo. "We are making prudent structural changes where it makes business sense to consolidate some functions."

Defeo said employees were notified of the cuts Tuesday and will receive a minimum severance of 60 days pay from their last day worked.

The pilot stores will close over the next six to eight weeks as merchandise is cleared out.

BMO Capital Markets analyst Wayne Hood said as Home Depot's business model evolves, "you expect to look for ways to become more efficient," he said. "If you're opening fewer stores, can you streamline real estate and construction functions? Absolutely."

Shares rose 11 cents to $27.73.