No Severance Pay for 31,000 Toys “R” Us Employees
Toys “R” Us was once the unrivaled mega toy store in the days before the internet. Now, 70 years after its founding, it is liquidating nearly 400 of its locations. 31,000 employees will be let go without severance pay.
Toys “R” Us filed for Chapter 11 bankruptcy back in September. Under bankruptcy laws the iconic toy retailer is not mandated to pay its workforce severance packages. Federal law does require employees to be compensated with 60 days’ pay. Workers will also continue to receive other benefits like health insurance and 401(k).
To put this in perspective, according to the Labor Department, last year alone the retail industry declined by nearly 30,000 jobs. Toys “R” Us has since told employees they plan on closing all U.S.-based stores.
As for the brand, they do have plans to keep around 200 of their stronger locations. They could also go the route of other recently-bankrupt retailers like American Apparel and Sharper Image. Both have found a rebirth online.
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