Bed Bath & Beyond Cuts Jobs and Removes COO Role Amid Overhaul

(Bloomberg) -- Bed Bath & Beyond Inc. is reducing its corporate workforce by 7% and has eliminated the chief operating officer role, part of the home-goods retailer’s overhaul of operations following pressure from activist investors.

• Eugene Castagna, who had served as COO and president, has left the company, Bed Bath & Beyond said in a statement. Interim Chief Executive Officer Mary Winston said the actions are “an important step in simplifying our corporate structure.”

Key Insights

• Winston is trying to reverse a years-long slide in the company’s stock that has coincided with sales stagnation. To trim costs, the company is including vice presidents, directors, managers and professional staff in the job cuts and will look for more areas to reduce expenses.
• The overhaul follows pressure from a trio of investors -- Legion Partners Asset Management LLC, Macellum Advisors and Ancora Advisors LLC -- that led to the ouster of the previous CEO. The activist shareholders outlined a 100-day plan in April to beef up performance, including a call for a sale of non-core assets, arguing a divestiture could generate about $1.4 billion.

Market Reaction

• Bed Bath & Beyond shares fell as much as 2.5% on Tuesday before recovering much of the loss. The stock has fallen 18% so far this year.

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