01/31/2013 02:27 EST | Updated 04/02/2013 05:12 EDT

Sears Canada Layoffs Will See 700 Workers Lose Their Jobs

Shoppers walk into Sears in Peabody, Mass., Monday, May 14, 2012. Sears Holdings Corp. said Thursday, May 17, 2012, that it’s spinning off a stake in its Canada business, as the struggling retailer looks to focus on stemming declining sales at its remaining U.S. stores. The announcement came as the company reported that returned to a profit in the first quarter, as a result of a gain on the sale of its stores. (AP Photo/Elise Amendola)

TORONTO - Sears Canada (TSX:SCC) announced Thursday it is laying off 700 workers across the country as part of a move to "right-size" the company and focus on restructuring its business.

The national retailer says 360 people are being laid off from its department stores and about 300 from its distribution centres. The remaining workers are being let go from head office and other support areas.

The job cuts will be across Canada.

"This is part of our initiative to right-size the organization, which is working in concert with other initiatives to make Sears successful," said Sears spokesman Vince Power in a statement.

The city of Belleville in eastern Ontario, where Sears has a distribution centre that deals with small-ticket catalogue and online sales, will lose 120 jobs — the largest single cut in the current round of downsizing.

A distribution centre in Regina, which also deals primarily in smaller items for western customers, will lose 80 jobs. There will be smaller job losses at distribution centres in the Toronto and Montreal areas, which deal more with larger items, and at two small distribution centres in Calgary and Vancouver.

By contrast, the job losses at Sears retail operations will be smaller — in the range of two to four people per store.

Power said the distribution centres are feeling a bigger impact because "over time we've been able to improve some processes, so we're able to do more in the distribution centres."

"And also we didn't want to affect customer service in the stores."

Sears Canada has been revamping operations to encourage more customers to return to its stores after years of declining sales, and also to prepare for the entry of numerous U.S. retailers, including discount chain Target (NYSE:TGT).

In a report assessing the impact of Target's arrival, released last fall, Barclays Capital said that Sears Canada, Walmart, Old Navy, Loblaw's Joe Fresh brand and Canadian Tire are the retailers most at risk.

The company has 195 corporate stores, 269 hometown dealer stores, eight home services show rooms and more than 1,500 merchandise pick-up locations.

Amid declining sales, Sears announced in December that it was closing four of its prime stores in three cities — Vancouver, Calgary and Ottawa. The locations are being taken over by major U.S. retailer Nordstrom for its first Canadian locations.

By mid-afternoon, shares in Sears Canada were down 10 cents or 1.05 per cent to $9.45 on the Toronto Stock Exchange.

Earlier this month, Sears Canada announced a new partnership with the Aldo Group, who will design and manufacture footwear lines for their Nevada, Attitude and Jessica brands.

It also inked a deal with Buffalo International Inc., who will produce an entire line of women and men's Nevada denim-based apparel for the department store.

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