RadioShack to end matching retirement contributions for employees

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RadioShack announced that it will end its retirement contribution matching program for employees as it cuts costs.

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Danielle Abril

Staff Writer- Dallas Business Journal

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RadioShack Corp. reportedly told employees it will stop matching their contributions to retirement funds in an attempt to cut internal costs.

The Fort Worth-based electronics retailer sent an internal memo that told employees it will discontinue matching 401K and 1165E plans Feb.1, according to Bloomberg. The retailer still intends to close the 1,100 stores it announced earlier this year before lenders nixed the plan. The closures, still contingent upon lender consent, are expected to happen next year, Bloomberg reported. Cuts might not stop there. RadioShack also reportedly is reviewing its employees' health benefits.

The news comes two days after Salus Capital Partners LLC demanded repayment of the $250 million loan it lent the company with Ceberus Capital Management. The loans were a part of RadioShack's recapitalization plan. The lenders claim that the retailer breached the contract.

In response, RadioShack released a statement calling the claims "wrong" and "self-serving." In the statement the company announced that it had reconfigured its stores hours and reduced costs in operations and IT. It alluded to additional cuts that could save the company up to $200 million. Those cuts are expected to be announce in its next earnings release.

RadioShack's financial struggles deepened this year, causing the retailer to seek additional capital and consider bankruptcy.

Danielle covers technology, retail, restaurants and hospitality for the Dallas Business Journal. Subscribe to our new TechFlash email newsletter.