Federated Consolidates, Cuts 290 Jobs

Federated Department Stores, Inc. will close data centers in St. Louis and Lorain, Ohio, eliminating about 290 IT staff positions, the company said today. The two data centers were acquired by Federated in its merger with The May Department Stores Company in August 2005, but the company no longer needs the capacity. The consolidation will begin in January and be completed by June of next year.

The St. Louis data center, which employs 195 workers, will be closed. All non-management salaried workers are being offered positions at a Federated site in Duluth, Ga. if they elect to transfer. About 95 employees at the Lorain site will be affected as most computer operations and the help desk portions of the data center are closed. About 125 programmers will continue to work at the Lorain facility. Federated gave no indication as to whether it would seek to sell or lease the St. Louis data center.

Federated is one of the nation’s largest retailers, with fiscal 2006 sales from its 850 Macys and Bloomingdales stores expected to top $27 billion. Federated said the data center consolidations are part of its program to find $175 million in cost cuts in 2006 and at least $450 million in 2007 and beyond as a result of the May Company merger.

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About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.