One of the few bright spots in the retail sector is home improvement, with giants like Lowe’s and Home Depot opening dozens of new stores and touting strong earnings that beat expectations in the fourth quarter. To better prepare for a future dominated by online shopping, both stores have retooled themselves: Lowe’s is adopting innovative technology like augmented reality (AR) and making strategic staffing cuts that it claims will improve customer service. But workers at several Lowe’s stores on Florida’s Gulf Coast tell Fast Company that those changes may just make the customer experience even worse.
Lowe’s laid off 2,400 assistant store managers in January and then announced the hiring of 1,800 full-time staff and more than 45,000 seasonal employees just a month later.
Lowe’s CEO Robert Niblock stated in the layoff memo to staff that “the changes will better align store staffing with customer demand, shift resources from back-of-the-store activities to customer-facing ones, and enhance our efficiency and productivity.”
Or in a nutshell, Lowe’s cut middle management in order to put more hourly paid workers on the floor. If productivity is measured by sales in a brick-and-mortar retail setting, it certainly seems logical for a home-improvement chain to have larger numbers of staff to help customers, right?
The company’s goal is to court customers who are increasingly going online to do their shopping. But if their in-store experience is lousy because they don’t have access to knowledgable assistant store managers, then Lowe’s big push into increased productivity, staff restructuring, and technological improvements could backfire.
Steven Cox, professor of marketing at the McColl School of Business at Queens University of Charlotte, says of the Lowe’s restructuring, “I think it will be a good strategy come spring. You are always going to have a transition, but reducing managers and putting more people on the floor will assist DIYers who make smaller purchases and need more help. Provided that the new hires are trained, they’ll come up to speed.”
I spoke to both current and former Lowe’s employees in the Tampa-St. Petersburg area in order to get a snapshot of how its strategy is playing out so far. To protect their anonymity, only their first names are used.
Current and former employees told Fast Company that the company fumbled the layoffs in a way that hurt morale even more than expected in such situations.
“I have nothing against Lowe’s. What I have a problem with is how they handled the layoffs,” says Paul, who received an unexpected email from Hunton & Williams, the law firm that handled the process, four days before he was told by his manager that he was losing his job. Paul wasn’t the only one to receive a surprise email.
A spokesperson for Lowe’s explained in an email, “We believe employees impacted by decisions personally affecting them and their families should learn news directly from the company. To help support employees, company leadership at all levels, including the CEO, communicated directly with employees.“
Another employee stated, “The managers didn’t tell us. The employees found out and told each other. They could have let us know they were doing this and started training people so it was a smooth transition, and let people go over a period of time.”
DIY stores are unique in the retail landscape because customers are often dependent on staff knowledge of the products and how to use them. While technology can and does improve customer experience, such as the chain’s recent introduction of in-store navigation using AR, it’s human expertise that really matters in this sector.
Lowe’s employs 285,000 people in the U.S., Canada, and Mexico. The chain serves more than 17 million customers each week. Those who lost their jobs are a small proportion of the total headcount; as the CEO stated, “The changes we made today impact less than 1% of our workforce.” So do those layoffs really make much of a difference?
Susie, a full-time veteran, thinks they do, because she says assistant store managers were knowledgeable and able to handle customer complaints efficiently: “Our department manager has now been put in charge of five departments; middle management is gone. Customers are saying to me, ‘I’m going to Home Depot because you don’t have the staff.’”
On TheLayoff.com’s “Lowe’s Cos. Layoffs” thread, one anonymous commenter stated:
If they thought sales were soft before wait til they see what happens when customers have no one with knowledge helping them love where they live . . . I was so proud of Lowe’s what a shame 🙁
What’s more, some long-term staff I spoke to feel that many new seasonal and part-time employees are not as committed to their jobs, and one part-time worker/college student unwittingly confirmed their suspicions: “I’m not worried about it because this isn’t my career. They could fire everyone but me and I don’t care.”
I asked a longtime employee at Home Depot, the chief competitor to Lowe’s, whether she thought the Lowe’s restructuring would result in better productivity. She replied:
The assistant store managers are essential. It’s a stupid decision because you need all levels. [Hourly employees] come and go. They don’t get paid enough, they don’t get trained. They leave and it weakens everyone.
When I asked staff why they thought the layoffs occurred, they unanimously said it was to save money. One person said, “They’re trying to hire more part-time people so they don’t have to pay their benefits, which are awful anyways.”
Lowe’s says that it plans to hire 527 seasonal employees in the Tampa-St. Petersburg area. But several staffers said they have not yet seen evidence of this, and that they feel overstretched.
When I asked Susie whether the layoffs affected morale and customer service, she said:
We need help. We’re in limbo. Today I was aggravated because I have just one other person [in my department] to help me. It started the last three months. In the past couple weeks I’ve cried four times. The customers come to me and they take it out on me.
Lowe’s is not unusual within the changing retail landscape, which is evolving rapidly with the growth of online commerce. The frustrations of full-time retail staff due to reduced hours and weak benefits are common.
But staffers interviewed for this story feel under-supported as a result of the loss of their assistant store manager colleagues, a shortage of current employees, and a lack of knowledge on the floor at present.
“In six to eight months’ time, you’ll find out whether you cut muscle instead of fat. You’ll find out after the third quarter whether the strategy is working,” says Cox.
And Paul says the jury’s still out for his former coworkers on whether productivity is going to improve. Said one of the loss of their assistant store manager colleagues: “We lost our heart.”