- Bed Bath & Beyond is closing 43 stores, two warehouses, and one fulfillment center in New Jersey.
- The company is also slashing 377 jobs at its Union, NJ, corporate headquarters, effective April 9.
As embattled housewares giant Bed Bath & Beyond drastically shrinks its retail operation, the timing of store closures and layoffs in its home state of New Jersey is likely helping the company avoid millions of dollars in liabilities it might otherwise face.
On the morning of Tuesday, January 10, Bed Bath & Beyond CEO Sue Gove offered a rosy update about the company's turnaround strategy during its third-quarter earnings call.
"Our entire organization is laser-focused on maximizing the value of our company by reconnecting with our customers and positioning Bed Bath & Beyond, buybuy BABY, and Harmon for long-term success," she said.
Later that day, New Jersey Governor Phil Murphy signed a bill setting April 10 as the effective date of sweeping new rules that companies must follow when they lay off workers.
Current federal and state laws require 60-days' public notice of job cuts affecting 50 or more full-time workers at one location, and only require severance payments in the event that an employer does not give full notice.
Management-side employment lawyer Mark Diana, of the firm Ogletree Deakins, told Insider that starting April 10 in New Jersey, employers will be required to give 90 days' notice, include all part-time and full-time workers across all locations in the state, and pay mandatory severance of one week's earnings per year of service, with no cap on the number of weeks.
"What makes it kind of a kick in the teeth is you're often dealing with companies that are in some financial distress," Diana said. "That's why they're laying off a lot of employees."
Insider roughly estimates the newly required severance payments might have represented a liability to the company of several million dollars, based on median worker earnings reported in Bed Bath & Beyond's most recent proxy filing, layoff numbers reported to the state, and typical store staffing levels and tenure.
On February 7, less than a month after the bill signing, Bed Bath & Beyond updated its list of closing stores to include all 49 locations of its Harmon subsidiary — 30 of which are in New Jersey — as well as 13 flagship-brand stores in the state, up from three locations that were previously announced.
Representatives for Bed Bath & Beyond did not respond to Insider's question about whether the law influenced the timing of its New Jersey closures.
Filings with the New Jersey Department of Labor also show that the company notified the state in January and February that it would cut nearly 1,300 jobs across four locations: 262 at a Harmon warehouse, 84 at a Bed Bath & Beyond warehouse, 572 at an e-commerce fulfillment center, and 377 at its corporate headquarters.
All four layoff notices have effective dates of April 9 or earlier, and a New Jersey store manager told Insider that his store and all others scheduled to close in the state are set to be fully vacated before the April 10 law kicks in. The manager asked to remain anonymous until his position is terminated, but his identity is known to Insider.
The company has not mentioned any connection between the new rules and the layoff timing in communications to stores, the manager said, but he noted that store closures in other states will occur after April 10.
Unlike prior cuts in which as many as 12 weeks of severance pay were given, Bed Bath & Beyond workers in several states affected by this round of layoffs tell Insider they will receive nothing. The company has previously declined to comment regarding severance payments.
Management teams at stores are slated to receive a retention bonus equal to about one week's earnings if they stay until the last day of their employment: $2,000 in the case of store managers, $1,500 for assistant managers, and $750 for supervisors, multiple store managers told Insider. The figures are consistent with reports from other media outlets.
It's not clear how the new regulations would apply to "straddle" cases in which notification happens before April 10 but layoffs occur after, Ogletree Deakins' Diana said, but completing the whole process before the deadline eliminates that uncertainty for Bed Bath & Beyond.
"I don't think this law came as any surprise to large New Jersey-based employers," he said. "It was just a matter of when, not whether."