Sears, Microsoft job cuts reveal seismic shifts in nation's economy

After a wobbly couple of months, the nation’s new job creation appeared to get going again in June with some 222,000 new workers employed, more than expected.

The new report also adjusted upward estimates of newly-created jobs from previous months. Our colleague Ed Morrissey covered that here Friday in pithy but astute detail.

However, such encouraging news also masks discouraging developments for thousands of employees and families of some big-name national employers, like Microsoft and Sears — news that further reveals ongoing seismic changes for American retailers.

Both those companies announced major layoffs and closures this week.

Microsoft began notifying some 3,000 employees, mainly sales personnel, of their layoffs. Microsoft is undergoing a major staffing overhaul to focus its business less on software and gear and more on its cloud computing services called Azure.

The retailer Sears, which seems to be in a tightening financial death spiral under the leadership of CEO Eddie Lambert, announced the end of 400 jobs at its northwest suburban Chicago headquarters.

It also revealed another in a long string of store closures, this time eight Sears stores and 35 more Kmart outlets across the country. Going-out-of-business sales will begin there this week. Here’s the latest list of closures. The company closed 150 other stores earlier this year.

Sears ongoing decline is also instructive about America’s changing commercial history.

The iconic department store chain began in the 19th century when an observant railroad agent named Richard Sears realized that passengers on the growing web of railroads spreading across the country needed watches to meet schedules that stagecoaches never had. At first, Sears rode trains himself, walking the aisles to peddle timepieces to people just realizing how useful they could be.

Sears couldn’t keep up with demand though. So he took a partner, watchmaker Alvah Roebuck, then started a mail-order business. In 1888, they added the famous Sears catalogues, whose paper pages then served double-duty in outhouses.

Starting in West Virginia, the advent in 1896 of Rural Free Delivery, mail service to every isolated farmhouse, caused a nationwide consumer revolution. It brought affordable city goods from clothing, cars, sewing machines, even house-building kits within retail reach of everyone. Business exploded.

Even with its future now in doubt, Sears still has more than 1,000 store locations that began in 1925. Its own line of Kenmore appliances was launched then too. But it has sold off other holdings, including its revered Craftsman tool line.

Like all brick-and-mortar outlets, Sears Holdings faces overwhelming competition from the 21st century version of mail-order, the instantaneous ordering and same-day or overnight delivery of online sales unburdened by expensive static infrastructures. Amazon did not recently buy Whole Foods for its walk-in customers.

“We have fought hard for many years,” Sears’ Lampert wrote in a blog post, “to return unprofitable stores to a competitive position and to preserve jobs and, as a result, we had to absorb corresponding losses in the process.”