Borders Group Implements Corporate Job Eliminations as Part of Previously Announced Initiative to Reduce Annual Expenses by $120 Million

Borders Group Implements Corporate Job Eliminations as Part of Previously Announced Initiative to Reduce Annual Expenses by $120 Million

ANN ARBOR, Mich., June 3 /PRNewswire-FirstCall/ -- In its first quarter financial results release last week, Borders Group, Inc. (NYSE:BGP) announced that it is implementing an aggressive plan to reduce annual expenses by $120 million and expects to save half of that amount yet this fiscal year. The expense reduction is part of an overall effort to improve the company's bottom line that also includes continued progress on improving cash flow, reducing debt and enhancing inventory productivity, as previously disclosed.

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As part of this expense reduction program, management reported that the company is today implementing a corporate payroll reduction that includes the elimination of 156 corporate positions spread across virtually all departments of its Ann Arbor headquarters. Employees at the company's headquarters were informed of the job eliminations this morning.

In addition, Borders Group has eliminated 118 corporate posts that are based outside its headquarters, impacting primarily corporate employees in distribution centers, the field marketing organization, and the corporate sales division. These employees were informed yesterday.

In total, the corporate payroll reduction eliminates approximately 20% of the company's corporate positions but less than 1% of its total workforce. The job elimination, with the exception of less than a handful of positions, is limited to corporate employees and does not involve store employees at the company's 547 Borders superstores and 475 Waldenbooks Specialty Retail stores worldwide.

"While it is always difficult to eliminate jobs because of the impact on employees and their families, this is an important step in our company's cost reduction initiative that will improve our profitability and put us in a much better position for long-term success," said Borders Group Chief Executive Officer George Jones.

Borders Group is offering employees directly affected by the payroll reduction transition pay, severance packages, job placement assistance, counseling and other services.

About Borders Group

Headquartered in Ann Arbor, Mich., Borders Group, Inc. (NYSE:BGP) is a leading global retailer of books, music and movies. Through its subsidiaries, Borders Group employs approximately 30,000 people and operates over 1,100 stores worldwide, as well as the newly launched Borders.com. More information on the company is available at www.borders.com

Safe Harbor Statement

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. One can identify these forward-looking statements by the use of words such as "projects," "expect," "estimated," "look toward," "going forward," "continuing," "planning," "returning," "guidance," "goal," "will," "may," "intend," "anticipates," and other words of similar meaning. One can also identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address matters such as the company's future financial performance (including earnings per share, EBIT margins and inventory turns, liquidity, same-store sales, cost reduction initiatives, and anticipated capital expenditures and depreciation and amortization amounts), its exploration of strategic alternatives, its financing agreement with Pershing Square and the benefits thereof, strategic plans and expected financing and benefits relating to such plans (including steps to be taken to improve the performance of domestic superstores, the downsizing of the Waldenbooks Specialty Retail Segment and the new proprietary Web site and its roll out to superstores).

These statements are subject to risks and uncertainties that could cause actual results and plans to differ materially from those included in the company's forward-looking statements. These risks and uncertainties include, but are not limited to, consumer demand for the company's products, particularly during the holiday season, which is believed to be related to general economic and geopolitical conditions, competition and other factors; the availability of adequate capital to fund the company's operations and to carry out its strategic plans; the performance of the company's information technology systems and the development of improvements to the systems necessary to implement the company's strategic plan, and, with respect to the exploration of strategic alternatives including the sale of certain parts of the company or the sale of the entire company, the ability to attract interested third parties.

The company's periodic reports filed from time to time with the Securities and Exchange Commission contain more detailed discussions of these and other risk factors that could cause actual results and plans to differ materially from those included in the forward-looking statements, and those discussions are incorporated herein by reference. The company does not undertake any obligation to update forward-looking statements.

First Call Analyst:
FCMN Contact: aroman@bordersgroupinc.com

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Source: Borders Group

CONTACT: Anne Roman of Borders Group, +1-734-477-1392

Web site:

http://www.bordersgroupinc.com/
http://www.borders.com/

Company News On-Call:

http://www.prnewswire.com/comp/106169.html

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