RadioShack Will Stop Matching Workers’ Retirement Contributions Next Year

RadioShack, the electronics retailer that once called itself “America’s Technology Store” and now wants to repair your cracked iPhone screen, is willing to try just about anything to stay in business. While they negotiate with lenders for permission to close more stores, the chain announced that it will end matching contributions to employees’ retirement plans as of February 1, 2015.

Bloomberg News got hold of a memorandum from the company’s chief executive officer, where he explains that the company is reviewing its health insurance options, but that it will end matching of employees’ contributions to their 401(k) and 1165(e) retirement accounts as of February. What we don’t know is how many employees that includes, or exactly how much money they would save by ending those contributions. Employees could, of course, continue to fund their own retirement accounts.

The company did not elaborate on the contents of the memo other than to confirm that they are indeed looking for ways to cut costs. The company received a letter this week from one of its lenders that it is in default on a $250 million loan, but they are working with that lender, Salus. The company’s original solution to its financial problems was to close 1,100 stores, but its lenders rejected that plan.

Radio Shack hasn’t turned a profit in ten quarters, or more than two and a half years.

RadioShack to End 401(K) Retirement Matching to Cut Costs [Bloomberg News]

by Laura Northrup via Consumerist