Kohl’s is slashing its corporate workforce as it scrambles to make up for mistakes like carrying less inventory and shrinking its fine-jewelry business

After announcing earlier this month it would close 27 stores in 15 states by April, Kohl’s also revealed it will cut 10% of its corporate workforce to improve profitability. The company saw an 8.8% drop in net sales to $3.5 billion during the third quarter of 2024, according to its most recent earnings report. 

About 4,000 people work at Kohl’s headquarters, based in Menomonee Falls, a town outside Milwaukee, according to Milwaukee Journal Sentinel. Assuming the 4,000 employee figure, it would seem about 400 jobs were impacted. However, a Kohl’s spokesperson told Fortune the number of layoffs was at “less than 200” because some of the layoffs were for unfilled jobs. The company said it would not disclose a specific corporate headcount or the number of associates impacted.

“Knowing the impact this has on our associates, we took this decision very seriously,” Jen Johnson, SVP of corporate communications at Kohl’s told Fortune. “The [store] closures and the corporate workforce reduction are both actions to support our commitments to increase efficiencies and improve profitability in the business for the long-term benefit of our associates and customers.”

Affected employees are receiving two weeks’ worth of pay, plus a severance package. In 2024, the company also cut “a few dozen jobs” in its credit department, and in 2023, laid off 60 people from its corporate headquarters. The vast majority of Kohl’s employees work across the company’s 1,150 stores.

In an SEC filing dated Jan. 9, the company revealed it was closing about 2.3% of its stores, but Kohl’s “continues to believe in the health and strength of its profitable store base.” Employees at the affected locations were offered a “competitive severance package” or could apply to other open jobs at Kohl’s.

The recent layoffs follow a year of change at Kohl’s. In November 2024, the company announced its CEO Tom Kingsbury would step down, which became effective Jan. 15. He was replaced by Ashley Buchanan, the former CEO of crafting retailer Michael’s. Buchanan was also chief merchandising and chief operating officer for Walmart U.S. e-commerce, and the former chief merchant at Sam’s Club. He is the third new CEO of Kohl’s since 2018. 

In a December 2024 call with Wall Street analysts, Kingsbury admitted to some of his mistakes during his time as CEO, like carrying less inventory—including certain sizing such as petites—and shrinking its fine-jewelry business. Kingsbury called his own decision to carry less inventory “shortsighted.” 

“We thought, ‘We can do more with a lot less,’ and that didn’t work out for us,” Kingsbury said during the call. Kingsbury was one of few CEOs to admit mistakes were made instead of blaming declining sales on the economy. 

However, Kingsbury also said on that call “it’s up to us to fix it,” which will now be up to Buchanan. The company reversed course and reintroduced its fine-jewelry selection, petite offerings, and private-label products. 

Kohl’s is also part of the larger trend of department stores struggling to find their place in today’s market, in part due to a rise in e-commerce. 

“The once-mighty titans of retail are faltering,” Justin Grooms, CEO of checkout technology company Bolt, wrote in a recent Fortune commentary article. Department stores are showing “symptoms of a seismic shift in the retail landscape.”

But, he also wrote “to write off department stores entirely would be premature.” This means more retailers will have to transform their business models to continue being successful.

“While I know this has been a challenging time for Kohl’s, I also know that this is a great company and a very strong brand,” Buchanan said in a statement to Kohl’s employees, according to the Milwaukee Journal Sentinel. “We will work to create a more sustainable plan for growth. This will not happen overnight.”