Shares of Limited Brands (NYSE: LB) soared north of 20% in the after hours trading session after the retailer said it will cut 850 of corporate jobs at its Ohio HQ.
Victoria's Secret brands will lose 40% of its corporate workforce while Bath & Body Works business will lose 10%. These efforts are made under a bigger cost-cutting campaign as L Brands expects to see its sales decrease by 20% in the second quarter.
This way, the firm is seeking to save $400 million on an annual basis, with $175 million to be achieved in the fiscal year 2020.
“Decisions relating to our workforce are incredibly difficult and not taken lightly, but these actions are necessary to best position our company for the long-term. On behalf of the Board and management team, I’d like to extend our deepest appreciation to the impacted associates for their contributions and dedication over the years,” said CEO Andrew Meslow in a written statement.
The agreement to sell Victoria’s Secret business to Sycamore Partners fell apart in April amid the pandemic.
L Brands share price is trading around $23 in premarket trading. This is a new 5-month high for the stock.