Woodward & Lothrop has eliminated an undisclosed number of management jobs in recent days as part of a major management restructuring.
Woodies Chairman Edwin K. Hoffman said yesterday the job losses were part of a six-month effort to devise a new management structure. "What we've done is extremely beneficial to the company. We're in exceptional condition to meet the future," Hoffman said.
"We're leaner, and we're going to have better service and quicker decision-making. It's an all-around super restructuring," he said.
Hoffman would not say how many managers were effected, saying initially that he was not able to estimate the number. To a suggestion that he must have a general idea how many employes were affected, he said, "Maybe I do, but I'm not going to tell you."
"We have about 1,100 management people, so it's really not substantial," Hoffman said of the numbers involved.
Callers who identified themselves as employes of Woodies said that 30 to 50 supervisors and executives in several divisions had been terminated this week without advance notice. In a letter to employes dated June 21, Hoffman said that "new organization structures . . . have been accepted by top management" in the finance, marketing, operations and personnel divisions and were effective on the date of the letter.
Industry analysts who follow the department chain's fortunes said that the move was not unexpected and is part of a major repositioning by the company. It also comes at a time when Woodies' stock has increased rapidly in price.
From a closing bid of $34.50 at the end of last year, the stock increased to $60 bid on June 20. The figure represented a historic high for the stock, according to Eliot H. Benson, an analyst with Ferris & Co. Woodies closed at $58.75 bid yesterday on volume of 3,870 shares.
The run-up in the stock price reflects a number of things, including a generally better outlook for retailing, improvements in Woodies' results and continuing expectation--but no evidence--of a takeover attempt.
"I'm not surprised by the layoffs ," said Ken Gassman, an analyst with Wheat, First Securities in Richmond. "I think Woodies is poised for new directions for the future." Gassman reiterated predictions that the department store would expand into other types of retailing, in addition to continuing its traditional department store operations.
"The first thing you do is to look at excess baggage. That's what they've done," he said.
"We came to the conclusion that a more streamlined, responsive management structure would be required if we were to achieve our ambitious goals for the '80s," Hoffman said in his letter to employes. "We recognized the need to reduce overlapping layers of management, clarify responsibilities and, above all, better serve the needs of our customers.
"As functions were eliminated, the people involved in that function were terminated," Hoffman said in an interview. He said the cutback reached the corporate officer level, but he declined to give examples.