Troubled US convenience store operator Kmart has said that it plans to cut 660 jobs, including laying off 15% of staff at its headquarters, as part of the company’s on-going efforts to emerge from bankruptcy.

Kmart said it would axe 400 jobs at its corporate headquarters in Troy, Michigan and 123 corporate-support positions elsewhere. The retailer said it would also eliminate 137 positions that are currently vacant.

The company said the job cuts are expected to lead to cost savings of US$90m in Kmart’s fiscal 2003 year and $150m annually.

Following this latest round of job cuts, Kmart will have a total workforce of around 170,000.

"The realignment and restructuring of our corporate headcount operations to more closely support our stores is absolutely critical to Kmart's future success after it completes its Chapter 11 reorganisation," chief executive Julian Day was quoted by Reuters as saying.