Sears To Lay Off 100 Employees At Hoffman Estates HQ
HOFFMAN ESTATES, Ill. (CBS) -- Sears announced Thursday that 100 people will be laid off at its Hoffman Estates headquarters, despite millions of dollars in forthcoming income and property tax incentives.
The news comes a few months after the Illinois legislature agreed to give the company, which runs the Hoffman Estates Economic Development Area bearing its name, $150 million in income tax breaks over the next 10 years.
Lawmakers approved the tax breaks for Sears and for Chicago-based CME Group after both companies had been threatening to leave Illinois over a corporate tax hike that took effect at the beginning of last year.
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Does this layoff announcement violate the spirit of the legislation passed?
"I'm not sure. I wish I had an answer to that," said State Sen. Michael Noland (D-Elgin). "But I do know that, you know, if they'd announced these layoffs prior to the passage of that legislation, they would have had a much tougher go than they did."
A Sears spokesman said the layoffs "absolutely" do not violate the spirit of the tax breaks.
The layoffs announced Thursday were not the only act of downsizing by Sears since the tax incentives were approved by lawmakers last year.
In late December, Sears announced that up to 120 Sears and K-Mart stores were closing nationwide. In a letter to employees shortly after Christmas, Sears chief executive officer and president Lou D'Ambrosio said that the retailer had not "generated the results we were seeking during the holiday."
So far, Sears has revealed 81 of the stores that will close, none of which is in Illinois.
Sears must maintain 4,200 jobs in its economic development area to keep the tax incentives. It has no obligation to maintain a minimum job number at its corporate headquarters.
Even with Thursday's layoff announcement, the EDA still exceeds the minimum number of jobs required to keep the tax incentives.
"We've known that the situation with Sears is much worse than had been reported," Noland said. "The financials have been worsening for a number of years, and [the layoffs come] as no shock."
