DOW JONES NEWSWIRES 
 

Borders Group Inc. (BGP) will cut 742 jobs, less than 3% of its work force, as it trims store management to match sales volume.

The struggling books and music retailer said it eliminated 679 manager and supervisor positions at Borders superstores, effective Thursday. The other cuts were at its Waldenbooks specialty retail stores, where the company also focused on reducing management and supervisory positions.

Borders will offer transition pay and severance to all affected employees.

"Reducing the number of leadership positions in our stores was a necessary step as we streamline and focus our payroll investment on the sales floor," said Chief Executive Officer Ron Marshall.

Last month, Borders cut about 12% of its corporate work force and several high-level corporate positions to reduce management layers. In January, the company ousted its chief executive and his management team, installing Marshall, who has a financial background.

Borders and its largest shareholder, Pershing Square Capital Management LP, have extended to April 15 the expiration date of their agreement for Pershing Square to buy Borders' U.K.-based Paperchase gifts and stationery business. The deadline for Borders to repay a $42.5 million loan from Pershing Square made earlier this year was also extended to that date.

The book chain, like almost all retailers, had a disappointing holiday season. But its problems stretch back considerably further. A year ago, the company disclosed it faced a potential liquidity crunch and put itself up for sale. Despite its weak stock price, Borders couldn't find a buyer.

Borders' shares recently traded at 51 cents, down 8.9%, amid a broad market selloff. The shares have fallen 95% in the past year.

-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com