In order to “realign its operational focus to support its business-to-business solutions and IT services business units and improve costs,” Office Depot is planning to restructure, according to a U.S. Securities and Exchange Commission (SEC) filing.
The plans are expected to be completed by the end of 2023, and the company will lay off more than 13,000 employees in addition to closing stores and distribution centers, the filing indicated.
The restructuring is anticipated to yield up to $860 million in net savings and could incur charges of up to $543 million. The company is not yet sure the location or the total number of the closings, according to the filing.
Office Depot closed about 50 retail stores — including Office Max locations — in 2019, according to the International Business Times.
The company announced $1.7 billion in available liquidity and its highest net cash position in two years in its earnings report for the first quarter of 2020.
"While significant challenges remain ahead, we are in a strong financial position and remain focused on utilizing our B2B platform to provide essential products and services necessary to help our customers and the nation weather through this pandemic," Office Depot CEO Gerry Smith said in a May 6 statement. "We have an extremely strong balance sheet that has been further enhanced by refinancing our credit facility and paying off our term loan, which preserves cash and extends our credit facility maturity to 2025."
Last month, Office Depot announced the refinancing of its current asset-based credit facility with a new five-year arrangement and retired its term loan credit agreement due in 2022. The retailer’s new $1.3 billion asset-based credit facility was comprised of a $1.2 billion revolving credit facility in addition to a $100 million first-in, last-out facility.
Office Depot borrowed an overall $400 million with the new credit facility at the time of the closing of the deal.