Borders Group Cuts 136 Jobs, Or 12% Of Corporate Work Force

DOW JONES NEWSWIRES

Borders Group Inc. (BGP) cut another 136 corporate jobs, or about 12% of its corporate work force, as the struggling books and music retailer looks to cut costs amid its turnaround.

Earlier this month, the company eliminated several high-level corporate positions to reduce management layers. The latest job cuts amount to 1% of the work force.

Shares were recently up 3.9% to 53 cents. Although the stock is up 33% so far this year, it has still lost 95% of its value in the last 12 months.

New Chief Executive Ron Marshall on Thursday called the layoffs a necessary step as the company tries to get back on track financially.

Borders and its largest shareholder, Pershing Square Capital Management LP, earlier this month again extended the expiration date of their agreement for Pershing Square to buy Borders' U.K.-based Paperchase gifts and stationery business. The deadline for Borders to repay a $42.5 million loan from Pershing Square made earlier this year was also extended to April 15.

Last month, Borders ousted its chief executive and his management team, installing Marshall, who has a strong financial background.

The book chain, like almost all retailers, had a disappointing holiday season. But its problems stretch back considerably further. Last March, the company disclosed it faced a potential liquidity crunch and put itself up for sale. Despite its weak stock price, Borders couldn't find a buyer.