WEST CHESTER, Pa., Nov. 12 /PRNewswire/ -- QVC, Inc., one of the world's largest multimedia retailers, today announced several initiatives to support its long-term growth strategy while also addressing current business conditions.
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"We remain committed to managing our company for the long term as we navigate this unprecedented economic crisis," said Mike George, QVC's president and CEO. "To ensure we're operating as efficiently as possible, we made difficult decisions to lower our operating costs while taking several steps to invest in our future and better serve our customers."
Key actions include:
-- Simplifying management and support structure and streamlining key processes. As a result of these changes, approximately 160 team members were laid off today from the company's U.S. locations. Impacted employees have been offered an enhanced severance package.
-- Transforming distribution infrastructure to support long-term growth while continuing to deliver the high level of service QVC's customers have come to expect. This Distribution Transformation program involves:
-- Phasing out most functions of its West Chester, Pa., Distribution Center over the next 14 months, other than Jewelry returns processing.
-- Converting its Florence, S.C., Distribution Center into a state-of-the-art facility for distributing its Apparel, Accessories and Jewelry products.
-- Shifting the majority of its Home product lines to its Rocky Mount, N.C., and Suffolk, Va., Distribution Centers.
-- Refocusing its Lancaster, Pa., Distribution Center on its Health and Beauty product lines while also serving as a centralized returns center for Apparel, Accessories, Health and Beauty.
As a result of these changes, approximately 500 positions in its West Chester, Pa., Distribution Center will be eliminated over time, and QVC intends to create approximately 200 positions at its Florence Distribution Center. In addition, the company will be shifting the volume to its other distribution centers, which will provide the opportunity for additional work hours for team members.
-- Improving customer service efficiency and supporting new work from home models. Customer service changes the company will make over the next year include closing its West Chester, Pa., Call Center on or about March 27, 2009, resulting in the elimination of approximately 250 jobs. All functions of this center will be redeployed to the company's San Antonio, Texas; Chesapeake, Va.; and Port St. Lucie, Fla., call centers, which will provide the opportunity for additional work hours for team members. The company will also be expanding its successful home representative program, which enables team members to work some shifts at home and some shifts in its call centers. QVC expects to have more than 300 representatives in this program by the end of next year.
In total, the initiatives outlined above will result in the elimination of approximately 900 positions over the next 14 months, offset by the creation of approximately 200 new positions, for a net reduction of approximately 700 positions, or 5.8 percent of QVC's U.S. workforce. These job reductions and other cost-cutting initiatives will result in a $30-$40 million reduction in 2009 forecasted operating costs.
"I had hoped we could avoid layoffs as we pursued our long-term growth strategies, but after witnessing the continuing deterioration in the economy, I came to the reluctant conclusion that this was not going to be possible," added George. "While we did our best to minimize the number of job reductions today, we lost many valued team members who were instrumental in building our business. We have offered them enhanced severance packages and outplacement services to help with the transition. At the same time, we continue to make investments in the technologies, programs, processes and people necessary to move us forward to becoming the preeminent lifestyle retailer in this new multimedia world."
About QVC
QVC, Inc., a wholly owned subsidiary of Liberty Media Corporation attributed to the Liberty Interactive Group , is one of the largest multimedia retailers in the world. QVC is committed to providing its customers with thousands of the most innovative and contemporary beauty, fashion, jewelry and home products. Its programming is distributed to more than 166 million homes worldwide. The company's Web site, QVC.com, is ranked among the top general merchant Internet sites. With subsidiaries in the United Kingdom, Germany and Japan, West Chester, Pa.-based QVC has shipped more than a billion packages in its 22-year history. QVC, Q, and the Q Ribbon Logo are registered service marks of ER Marks, Inc.
About Liberty Media Corporation
Liberty Media Corporation owns interests in a broad range of electronic retailing, media, communications and entertainment businesses. Those interests are attributed to three tracking stock groups: (1) the Liberty Interactive group , which includes Liberty's interests in QVC, Provide Commerce, Backcountry.com, BUYSEASONS, Bodybuilding.com, IAC/InterActiveCorp, and Expedia, (2) the Liberty Entertainment group , which includes Liberty's interests in The DIRECTV Group, Inc., Starz Entertainment, FUN Technologies, Inc., GSN, LLC, WildBlue Communications, Inc., and Liberty Sports Holdings LLC, and (3) the Liberty Capital group , which includes all businesses, assets and liabilities not attributed to the Interactive group or the Entertainment group including its subsidiaries Starz Media, LLC, Atlanta National League Baseball Club, Inc., and TruePosition, Inc., and minority equity investments in Time Warner Inc. and Sprint Nextel Corporation.
Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including the statements regarding anticipated cost reductions from the announced initiatives. These forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Actual results, performance or achievements of QVC could differ materially from those expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include, among others, the risks and factors described in the publicly filed documents of Liberty. These forward-looking statements speak only as of the date of this press release. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
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