Earlier Wednesday, Staples announced that it would acquire Office Depot in a $US6.3 billion deal.
What’s in it for Staples’ shareholders?
The company explains in one word that probably has every Staples and Office Depot employee nervous.
We expect to recognise at least $US1 billion of synergies as we aggressively reduce global expenses and optimise our retail footprint. These savings will dramatically accelerate our strategic reinvention which is focused on driving growth in our delivery businesses and in categories beyond office supplies.
“Synergies” usually means the closing and combining of offices and stores, which also often comes with job cuts.
The two companies together employ more than 58,000 people.
Assuming half of those synergies ($US500 million) come from reduced headcount and each worker saves $US150,000, this back-of-the-envelope calculation would see more than 3,300 employees being let go.
The companies haven’t actually announced or quantified and reductions in headcount just yet. But you can bet that announcement is coming.