Home Depot Slashes HR Staff By Half, 1,000 Will Go

April 7, 2008
Home Depot is reorganizing the human resources function at its company—a move that will result in cutting its 2,200-person HR staff in the field by about 50 percent.

The Atlanta-based home supplies retailer is switching from having an HR manager in each store to establishing 230 district teams. Each team, which will be made up of an HR district manager and three HR managers who report to that person, will oversee six to 10 stores, says spokesman Ron DeFeo.

Each store will continue to have an administrative HR employee on site who will oversee schedules of the associates. Home Depot is also creating a service center to handle HR calls from employees and managers. The company is hiring 200 representatives to staff the center, DeFeo says.

Home Depot hopes to apply cost savings resulting from the restructuring of its HR organization toward hiring more sales associates in its stores, DeFeo says. The company’s goal is to add three associates to the floor of each of its 1,970 U.S. stores by year-end.

Home Depot has been reeling from the housing market collapse. Earlier this year, the company announced it was laying off 500 employees from its headquarters.

Analysts applaud the move by Home Depot, noting that it wasn’t necessary for the company to have one and in some cases two HR managers in each store.

The old HR structure was established by Dennis Donovan, a General Electric veteran, who left Home Depot early last year.

“We are in the worst housing crisis ever, so cost-cutting is a must for Home Depot,” says Howard Davidowitz, chairman of Davidowitz & Associates, a New York-based retail consulting and investment banking firm.

The old HR structure at Home Depot “was way overdone and not typical for retail operations like Home Depot,” Davidowitz says. “I think it’s proper for Home Depot to spend its money on the people on the floor who are servicing their customers.”

Home Depot will be filling the district manager team spots during the next several weeks. HR managers are invited to apply for these and other jobs within the company, DeFeo says.

The company expects to have the new structure in place by May.

—Jessica Marquez