What happened

Shares of Bed Bath & Beyond (NASDAQ:BBBY) have risen today, up by 3% as of 1 p.m. EST, after the company announced a strategic restructuring plan as part of its ongoing turnaround efforts. The consumer discretionary retailer will lay off roughly 500 workers as part of the initiative.

So what

"The restructuring program includes a reorganization and simplification of its field operations, significant reduction in management positions across the business, and outsourcing of several functions," the company said in a statement.

That will entail removing layers of management within the company as well as eliminating redundant positions. Bed Bath & Beyond also said it would reduce and realign regional zones in an effort to simplify its field operations. Outsourcing certain functions will free the company to focus on its "core competencies."

A fancy bathroom

Image source: Getty Images.

CEO Mark Tritton added:

We are announcing extensive changes today to right-size our organization as part of our efforts to reconstruct a modern, durable business model. We do not take this action lightly but, while difficult, these measured and purposeful steps are necessary. This will reset our cost structure, allowing us to reinvest where it matters most to our customers, to reestablish our authority in the Home space.

Now what

Bed Bath & Beyond expects the move to cut selling, general, and administrative (SG&A) costs by $85 million per year. For reference, SG&A costs for the first three quarters of the fiscal year have been $2.7 billion. The company will incur around $26 million in pre-tax charges related to the initiative, mostly for severance and related costs. Bed Bath & Beyond plans to expense those items in the fiscal fourth quarter.