DETROIT (AP) -- Borders Group Inc. said Tuesday it is eliminating 20 percent of its corporate positions, or nearly 275 jobs, as part of an effort by the nation's second-largest bookseller to cut annual expenses by $120 million.
Borders, which is more than a year into a restructuring and is considering selling off the company, said the cuts -- part of a cost-reduction plan announced last week -- represent less than 1 percent of its about 30,000 total work force.
"This is an important step in our company's cost reduction initiative that will improve our profitability and put us in a much better position for long-term success," Chief Executive George Jones said in a statement.
Borders has lost market share both to online retailers and to discounters amid a difficult U.S. economic climate. The company announced in March it would explore strategic alternatives, which could include a sale, and rival Barnes & Noble Inc. has assembled a management team to study the feasibility of a combination with Borders.
Borders shares fell 5 cents to $6.14.
The company said it is eliminating 156 corporate positions spread across nearly all departments of its Ann Arbor headquarters. And it said it has eliminated 118 corporate posts based outside headquarters.
Borders has said it expects to save half of the $120 million this fiscal year. It's part of a broader effort that also includes improving cash flow, reducing debt and enhancing inventory productivity.
The company also is working to cut non-payroll costs as part of the $120 million expense reduction target. That includes trimming costs for things such as utilities, travel, supplies and work with outside contractors.
Borders said last week its losses narrowed to $31.7 million, or 53 cents per share, in its fiscal first quarter ended May 3, compared with a loss of $35.9 million, or 61 cents per share, for the comparable period of 2007. The bookseller said revenue fell 0.8 percent to $792.5 million from $798.7 million.
The company said headquarters employees were told of the cuts Tuesday. The jobs being cut outside headquarters include primarily corporate employees in distribution centers, the field marketing organization and the corporate sales division. Borders said those employees were told of the plans Monday.
Borders said it will offer transition pay, severance packages, job placement assistance, counseling and other services.
The cuts -- all from existing jobs, not open positions -- are limited to corporate employees except for what the company described as "less than a handful of positions." The cuts do not involve Borders or Waldenbooks store employees.