Bed Bath & Beyond is now offering $500 bonuses to hourly employees to stop them from quitting before their stores close

• Bed Bath & Beyond will give workers at closing stores $500 to stay until the end, sources tell Insider.
• Many locations were suffering from staffing challenges after the company elected not to pay severance.
• Store leadership teams were previously offered retention bonuses worth roughly one week's pay.

Hourly workers at closing Bed Bath & Beyond locations are slated to receive a new retention bonus of up to $500 if they stay with the job until their store's closure is complete, multiple sources have told Insider.

The sources — current and former employees at locations in five states — say the incentive was announced on Friday and appears to address staffing challenges that have arisen in recent weeks. The sources have requested to remain anonymous, but Insider has confirmed their identities.

A spokesperson said the company's practice is to not comment on "employee matters and related decisions."

Sources tell Insider that workers in many stores were quitting before their store's liquidation process was complete, complicating efforts to shut down more than 400 retail stores.

"I don't think it was out of the goodness of their heart," one employee in Pennsylvania said in regard to the bonuses. "They were losing a lot of people."

In filings with the US Securities Exchange Commission Thursday, the company acknowledged that its challenges with retaining store personnel posed a material risk to its business.

It also reported preliminary fourth-quarter sales of $1.2 billion, down by 40% to 50% from the same period the year before, and noted continuing operating losses. 

For some workers, the only incentives to stay on the job are team solidarity and eligibility for unemployment after the position is terminated, one former manager in Texas told Insider.

While the $500 bonus for hourly workers is new, store leadership teams were previously slated to receive a retention bonus equal to about one week's earnings if they stay until the last day of their employment. Those bonuses will now be increased by about $250.

Store managers are now expected to receive $2,250, assistant managers should see $1,750, and supervisors should receive $1,000, multiple store managers told Insider. The figures are consistent with reports from other media outlets.

Employees of already closed stores are not eligible to receive the new bonuses, Insider's sources say.

Unlike prior rounds of job cuts and closures, Bed Bath & Beyond is not offering severance payments to store employees, sources confirmed to Insider after Bloomberg first reported the news earlier this month. Multiple workers also told Insider the company said it will no longer match 401k contributions for 2022.

In addition to the retail store closures and layoffs, deep cuts are being made in Bed Bath & Beyond's home state of New Jersey, where nearly 1,300 layoffs are slated to be completed at warehouses and corporate offices one day before sweeping new layoff rules take effect there.

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