Home Depot Will Cut 7,000 Jobs

Home Depot Inc., the world’s largest home-improvement retailer, will cut 7,000 jobs, or 2 percent of its workforce, and exit its design showroom business because of a drop in consumer spending.

Closing the Expo division, with 34 retail locations, will cost about $532 million before tax, of which $390 million will be recorded in the fourth quarter, Home Depot said today. It also plans to cut capital spending to about $1 billion in the 12 months ending February 2010 from $1.8 billion a year earlier, in anticipation of “continued weakness" in sales.

Declining home values and the highest unemployment in almost 16 years have caused consumers to cut back on living room renovations and cabinet purchases. Home Depot’s decision to cut costs and focus on its main home-improvement stores will be well-received by shareholders, according to David Schick, an analyst at Stifel Nicolaus & Co. in Baltimore.