Bed Bath & Beyond to cut about 500 jobs; expects about $26 million charge

FILE PHOTO: The sign outside the Bed Bath & Beyond store is seen in Westminster, Colorado, June 22, 2016 REUTERS/Rick Wilking

(Reuters) - Bed Bath & Beyond Inc BBBY.O would cut about 500 jobs, including management positions, as part of a restructuring program to turn around its business, the home-furnishing retailer said on Thursday.

The company expects the program, which would also involve reduction of regional zones to simplify its operations, to cut its expenses by about $85 million.

Bed Bath & Beyond also said it would outsource several functions as part of the restructuring.

Chief Executive Officer Mark Tritton said the restructuring, while difficult, was necessary and would reset the company’s cost structure, allowing it to re-invest where it matters most.

The company estimated a net pre-tax charge of about $26 million related to the program in the fourth quarter.

Earlier this month, it reported a 5.4% drop in same-store sales from the first two months of the current quarter, prompting Telsey Advisory Group analysts to say the company needed more aggressive changes.

Shares of the Union Township, New Jersey-based company rose 2% after the bell.

Reporting by Praveen Paramasivam in Bengaluru; Editing by Shailesh Kuber