J. Crew Cost-Cutting Clips 401(k) Match

J. Crew Group, Inc. has announced the initiation of a cost reduction program that includes reducing headcount, eliminating 2009 merit increases, and suspending the 401(k) match.
The moves, which are expected to generate approximately $40 million in annualized pre-tax savings, are being implemented in response to the “challenging economic environment.”
The details are as follows:
  • Reducing workforce by approximately 95 positions (including positions that are currently unfilled) primarily in the New York offices and support functions in the field and distribution centers. This represented an approximate 10% reduction in staffing for the departments included, while the affected associates have been offered severance and related transition assistance.
  • Suspending the 401(k) Plan Company matching contributions through the balance of 2009.
  • Eliminating 2009 merit based wage increases for the entire workforce.
The company said it had also initiated other company-wide cost reduction programs “to produce efficiencies in areas such as supply chain, store operations, real estate, catalog circulation, and other general savings in the New York offices.”