Earlier this year it looked like Hudson’s Bay — the company behind Saks Fifth Avenue, Lord & Taylor, and Gilt — was looking to expand its footprint by way of purchasing either Macy’s or Neiman Marcus. Now, the retailer looks to be doing the opposite and cutting back by eliminating some 2,000 positions amid lower than expected sales. 

Hudson’s Bay announced the lost jobs Thursday as part of a “Transformation Plan” aimed at streamlining operations, increasing efficiencies, and leveraging its scale in order to save about $260 million (or $350 million Canadian) annually by the end of 2018.

To save this much money, HBC says it will have to reduce its employee base by approximately 2,000 positions. The cuts, some of which were announced in February, will “flatten the organization by removing layers to make HBC more nimble and streamline the decision-making process.”

A spokesperson for the company tells the Wall Street Journal that the cuts will affect jobs at Hudson’s Bay corporate headquarters in Canada and store personnel. With about 66,000 employees currently employed by Hudson’s Bay, according to the company’s website, the lay offs will affect about 4% of its workforce.

News of the employee downsizing came on the same day that the retailer reported a 3% decline in retail sales to about $2.37 billion (or $3.2 billion Canadian) for the first quarter of 2017.

“This was a tough quarter for HBC. While the retail apparel market remains particularly challenging, we are taking steps to adapt, beginning with our Transformation Plan announced today,” Richard Baker, HBC’s Governor and Executive Chairman, said in a statement. “This initiative will reshape our organization to accelerate delivery of a best-in-class all-channel experience to our customers while improving our cost structure.”

The overall Transformation Plan was set in motion back in the fall of 2016 when the company announced it would undergo a comprehensive review of its North American business operations. That review i mostly completed, the company said Thursday.

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