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Lowe is laying off thousands of shop workers



Employees at a Lowe's Cos store in Louisville, Ky, on February 26.


Photo:

Luke Sharrett / Bloomberg News

Lowe
Co.


LAV -1.57%

p. told thousands of shop workers this week that their jobs were eliminated as the company was outsourced tasks such as mounting barbecues and janitorial services.

The home improvement chain notified maintenance personnel and assemblers who assembled grills, wheelbarrows and other products that they were laid off, according to employees. These roles will be taken over by third-party companies, employees said.

Each of Lowe's approximately 2,000 US stores has several employees doing these jobs. Employees are able to apply for new positions at the company, employees said, but are not guaranteed the same hourly wage.

Lowe employed 190,000 full-time employees and 110,000 part-time employees as of February 1. Business representatives did not & # 39; not immediately respond to comment requests.

The move is a sign that new CEO Marvin Ellison plans to continue to aggressively cut costs to improve chain profits. Earlier this year, the company lowered its performance targets for the year.

Traditional retailers examine their labor costs as they face increasing competition and adapt to the fact that consumers make more of their purchases online. Dealers from

Walmart
Inc.

to the smallest stores are under pressure when they increase the starting salary to attract workers in a tight US labor market. Walmart is testing a new store management structure that will thin the middle ranks. Lowe and rival

home Depot
Inc.

has added self-checking counters to free workers for other roles.

Mr. Ellison – former Deputy Chief of Home Depot and last Managing Director in demanding department stores

J. C. Penney
Co.

– Took over at Lowes last summer and moved quickly to mix executive ranks, often giving top jobs to former colleagues from Home Depot. He closed 47 less profitable US stores last year and closed down Orchard Supply hardware stores, a small regional hardware chain Lowe bought five years earlier.

In recent years, Lowe's revenue growth has lagged behind the rival Home Depot. Investors generally cheered Mr. Ellison's arrival at Lowe as an opportunity to boost performance. In the last quarter, Lowe's revenue growth exceeded Home Depot for the first time since 2016. However, profit margins fell more than expected, and Lowe's lowered expectations for the year, leading to a 12% fall in the company's share that day. [19659007] Write to Sarah Nassauer at sarah.nassauer@wsj.com

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