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Qurate to cut 2,000 jobs, shut QVC Lancaster warehouse, hire 1,200 in Bethlehem

The company will shift its focus to "digital transformation."

QVC Headquarters in West Chester in 2015.
QVC Headquarters in West Chester in 2015.Read moreStaff

Qurate Retail Inc., a West Chester company that owns the QVC home-shopping service, plans to shut its QVC warehouse in Lancaster and other facilities around the U.S., eliminating more than 2,000 of the company's 27,000 jobs over the next two years as it moves to consolidate its recent purchases of Florida-based TV-shopping rival HSN and Seattle-based online-shopping service Zulily.

As employees at QVC Studio Park waited Wednesday for word on who's leaving, investors cheered the cuts, sending shares up 1.5 percent for the day to $22.26. But the stock is still down from its peak of over $28 in February after a couple of disappointing quarterly sales reports.

The company planned to cut 350 jobs on Wednesday. Most of those are at HSN offices in St. Petersburg, Fla., and on Long Island, N.Y., where Qurate is closing HSN's Ingenious Designs facility. "A smaller number" of Qurate and QVC employees at its headquarters and video studios in West Chester also will lose their jobs, the company said.

And 1,725 more will be cut as the company closes warehouses in Lancaster; Roanoke, Va.; and Greenville, Tenn., after the 2019 Christmas shopping season. Qurate, which now employs about  27,000 in the United States, western Europe, and east Asia, also plans to hire at least 1,200 starting in 2019 at a new fulfillment center in Bethlehem, where Zulily already has a separate warehouse, spokesperson Maureen Siman said. Zulily began work on its fulfillment center there before Qurate bought the company in 2015.

The changes include management consolidation. Steve Hofmann, QVC's U.S. president, is leaving the company Friday and won't be replaced. Mary Campbell, chief merchandising officer, will head merchandising and marketing for the company's combined operations. HSN president Mike Fitzharris will take on responsibilities for combined video platform expansion and distribution, as well as HSN content operations in St. Petersburg.

Qurate said its revenues total $14 billion in North America, Europe, and Japan. The company shipped more than 170 million items through its TV and online channels last year. Qurate plans to cut back on warehouse operations and instead use outside operators to store and ship some items. The company said it "will evolve to a leased [instead of] owned model for many of its fulfillment facilities, to increase flexibility and reduce longer-term capital requirements."

The company expects its "streamlining" will speed delivery and help add programming and products, chief executive Mike George said in a statement. The big focus is on "digital transformation," helping customers buy with minimum hassle.

The company will combine QVC and HSN, the two largest home-shopping TV channels, into a single business unit, QXH, though there will still be separate brands and a reduced HSN presence at its old Fort Lauderdale headquarters.

Qurate hopes to save $40 million from the immediate job cuts, offset by at least $40 million in severance and restructuring expenses. The company expects total savings will rise to $120 million  to $125 million a year with the warehouse consolidations by 2022, along with more than $200 million in HSN cuts and savings previously announced.

The company also will spend $230 million on new facilities and warehouse automation (robots, logistics) and other shipping upgrades, plus an eventual $20 million a year extra for leasing warehouses instead of operating its own.