Illinois Tax Breaks Used To Keep Sears In State Could Be Lost With Layoffs Looming
Sears Holdings' struggles continue to pile up. The company announced 400 corporate layoffs Tuesday, the Daily Herald reports. And this latest round of layoffs may put tax breaks that Sears is receiving from the State of Illinois in jeopardy.
Under a deal negotiated in 2011 to keep Sears Holdings in Hoffman Estates, the company would receive an average of $15M/year in Economic Development for a Growing Economy income tax credits for a 10-year period. To collect the EDGE credits, Sears Holdings needed to employ a minimum of 4,250 workers at its HQ. Last year, Sears received $20M in EDGE credit, but had to move jobs to Illinois to fulfill its part of the deal.
Sears plans to save $1.25B in costs this year, mostly through store closures and selling its Craftsman home tools brand and real estate assets. Sears Holdings Chairman Eddie Lampert in March acquired a $200M stake in Sears debt, backed by the company's inventory and receivables. But analysts are growing wary that Lampert has no other plan to reverse Sears' fortunes aside from selling assets and cutting costs.