Anaheim, Calif. Pacific Sunwear of California Inc. said Wednesday it will cut 57 jobs or about 11% of its headquarters and field management staff, as part of a cost-cutting effort amid the weakening retail environment.
The company will eliminate 47 jobs at its Anaheim, Calif.-based headquarters and 10 field-management positions.
It will also lower capital spending to about $30 million from the more than $80 million it spent in 2008 and reduce inventory levels by at least 20% throughout the year.
Pacific Sunwear expects to take severance charges of $1.5 million in the fourth quarter ending Jan. 31 related to the job cuts and plans to save $5 million annually from the moves beginning in fiscal 2009, which begins Feb. 1.
"The actions announced today are aimed at putting our company in a stronger position to weather the continuing challenges in the macroeconomic environment while enabling us to continue moving forward with the key strategic initiatives we have under way," said Sally Frame Kasaks, chairman and CEO.
Pacific Sunwear added that with its current cost cuts it expects to maintain sufficient borrowing availability for the foreseeable future under its $150 million revolving credit facility, which expires in 2013.