1,100 Job Cuts for Saks

In another setback to the US job market, Saks (Saks Incorporated), the popular upscale retailer in the US, will be downsizing its operation and cut more than 1,000 jobs as it facing the worst financial situation for more than eight decades since its existence.

The positions affected with the layoff range from the corporate function to retail and store support and represents about 9% of the company’s total workforce at the moment.

With the job cut, Saks hopes to save operational cost between $50 million to $60 million for the year 2009. Most of the workers affected will have their job terminated by end of January.

Apart from eliminating jobs, the company will be taking a few other steps to weather the difficult financial predicament including suspending matching contributions to 401(k) plan, deferring benefits accruals for employees and stopping its merit-based salary increase practice. It isn’t clear at the moment if the strategies outlined would help actually help the company and results can only be reviewed towards the end of the year.

The company remains optimistic that they are taking the first steps towards the right direction with the announcement.

Saks is a Fortune 500 company and is listed in the New York Stock Exchange (NYSE). It owns Saks Fifth Avenue in New York City, a department store selling high end and luxury clothing and accessories.

Low Confidence In US Job Market

A recent workforce development survey by Rutgers University found out that the American’s confidence in the US job market is at an alarming low rate.

More than half thinks that the current period is a bad time to find job, and even there are job vacancies around, many of them are low quality jobs. Many are comparing the current situation with their last recession in between 2000-2002.

The study also discovered that for every three workers interviewed, one does not have adequate money to spend and sustain their daily life. Some were drawn into a more dangerous situation after finding that their credit card debts combined are higher than their retirement saving.

The US employment rate has increased to 5.7%, the highest level since the year 2004, while claims for unemployment benefits has surged.