Sarah Woodhams outside the Babies 'R' Us in Harleysville, Pa., where she worked as a registry department supervisor for seven years until it closed.
Photograph by Gene Smirnov for Money

‘Suddenly, I Have Purpose Again.’ Former Toys ‘R’ Us Employees Are Spending the Holidays Fighting for Their Severance Pay

More than a dozen former Toys ‘R’ Us employees spoke to MONEY about their struggles.
Nov 20, 2018

Sarah Woodhams lost her job not long after she lost her son.

The Babies ‘R’ Us registry department supervisor was rushed in an ambulance from her home in Harleysville, Pa., to the hospital when she delivered her son – and he was stillborn. She was still in the hospital when Toys ‘R’ Us announced it would shutter all of its U.S. stores.

Devastated and saddled with hospital bills, Woodhams quickly returned to work. “I needed the money,” she says, and only had two more months before her employer of seven years would close its doors. Suddenly, that new home she and her husband were eying was no longer an option. She couldn’t even afford memorial costs for her son, so she set up a GoFundMe page after a friend suggested it.

And that $1,700 ambulance bill? “I was depending on the severance pay for that,” Woodhams says. Problem is, the 33,000 Toys ‘R’ Us employees who lost their jobs this year were never given a dime.

“It’s a constant reminder of what happened and how heartless all of this is,” she says.

A memorial to Sarah Woodhams' son, Gabriel, who was stillborn, sits on the shelf at her home in Harleysville, Pa.
Photograph by Gene Smirnov for Money

Woodhams is one of thousands of former Toys ‘R’ Us employees who have turned to activism in the months since the rug was pulled out from under them. The iconic retailer shuttered its 800 U.S.-based stores earlier this year, months after it filed for bankruptcy protection — a move initially meant to create a more sustainable financial structure, but instead resulted in liquidation and the loss of tens of thousands of jobs. These employees say they’re owed a total of $75 million from the company and its lenders, and have taken their cause from New York to New Orleans to Washington, D.C. They’ve held protests, press conferences, and meetings with lawmakers like Sens. Bernie Sanders and Cory Booker.

In the five months since these efforts began, workers have expanded beyond the fight for severance pay and are now attempting to change bankruptcy laws that allow corporations to skirt obligations to employees.

“We put our heart and soul into this workplace,” says Jeanet Calderon, who worked at Toys ‘R’ Us in Bronx, N.Y., for 24 years. “We missed family time for years — and they repay us like this.”

More than a dozen former Toys ‘R’ Us employees spoke to Money about their struggles to find well-paying, full-time gigs, despite the strong job market. Without severance pay, many have been forced to abandon the blueprints for their careers, sacrifice their health, forgo their ideal retirement plans, and dip into their savings to make ends meet. The news came at already difficult times. One employee had just lost her father. Another was in the middle of planning her wedding. Another was about to close on a new home. Some of these employees worked at Toys ‘R’ Us their entire careers, making resumes for the first time ever, leaving the tight-knit group of coworkers they worked alongside for decades, and facing the challenges of unemployment late in their careers.

The onset of the holiday season feels bittersweet for many. Some enjoyed the hectic Thanksgiving and Black Friday hours, while others find the extra family time this year is a bright spot in an otherwise difficult past few months. But extra hours meant extra pay, and employees depended on that cash and seasonal store discounts for the holidays.

“I’ve already lost my full-time income and now I don’t have additional income for the holidays,” Woodhams says. “My daughter is seven, and she understands Toys ‘R’ Us is closed. But she doesn’t quite understand financially what we’re going through.”

Cheryl Claude (center) and Sarah Woodhams (in purple) participate in a joint action by Organization United for Respect (OUR) Walmart leaders and Rise Up Retail leaders to protest Angelo Gordon and Solus Alternative Asset Management on Oct. 9, 2018, in NYC.
Courtesy of Rise Up Retail

First-time activists

Toys ‘R’ Us was all Cheryl Claude knew. For 33 years, she considered the retailer her home. She met her husband there. She spent her holidays there. She viewed her coworkers as family.

But Claude doesn’t think she found her voice until she lost her job. Like many of her colleagues around the country, Claude was recruited by Rise Up Retail, a new workers’ advocacy group launched to help fight for severance pay for laid-off Toys ‘R’ Us employees as well as higher wages and better benefits for retail employees across the country. Claude got a call from a member of the campaign, so, she met the group at a nearby restaurant. Then, with encouragement, she started sharing her story — out loud, in front of lawmakers, journalists, colleagues, protestors, and anyone who would listen.

“I’ve never spoken in front of people like this. I don’t even speak in the middle of manager meetings,” Claude says. “But I did it. And ever since then, I’ve been speaking in front of all sorts of people.”

A wave of former Toys ‘R’ Us employees now consider themselves activists for the first time. With Rise Up Retail, scores of employees have traveled around the country to meet with lawmakers, held protests to demand their severance pay, and urged legislative change to better protect employees from the impacts of bankruptcy.

“It’s just wrong,” Claude says. “Thirty-three years I gave to them. How did they not think to give us anything?”

Before declaring bankruptcy and its subsequent liquidation, Toys ‘R’ Us’s severance pay policy would have compensated workers for two weeks for their first year on the job, and then another week of pay for each year they worked after that. That’s a significant amount of money for employees like Claude, who spent 33 years there. Bankruptcy made things more complicated — and severance pay, as a result, was no longer guaranteed.

But employee protests have proven effective. They’ve captured the attention of senators and other lawmakers in a number of meetings: In June, 19 lawmakers sent a letter to the private equity firms that owned Toys ‘R’ Us, questioning their decision to file for bankruptcy. In early October, Bain Capital and Kohlberg Kravis Roberts, two of the three firms that bought Toys ‘R’ Us in 2005, created a $20 million fund for severance pay, which was officially unveiled this week. And, later that month, Sen. Elizabeth Warren sent a letter to Vornado Realty Trust, the third firm that has not contributed to the severance pay fund, demanding it compensates these workers.

Bain Capital and Vornado Realty Trust did not respond to a request for comment, and Kohlberg Kravis Roberts declined to comment.

It’s a complicated and long-lasting battle; employees have still not received any kind of severance pay. But, former activists say, there has been progress.

“We really see these private equity firms stepping up for a solution that could be a precedent for other companies that go bankrupt,” says Carrie Gleason, who recruited a number of these employees as the campaign manager at Rise Up Retail. “We need to give these families what they were counting on to navigate this tumultuous moment.”

Severance pay is only part of the battle. These former employees are particularly frustrated with Toys ‘R’ Us creditors like Solus Alternative Asset Management and Angelo Gordon, which now own the retailer’s intellectual property. These investment firms have intentions to breathe fresh air into the storied brand — now operating it debt-free and without its hundreds of locations and employees. Just ahead of the holiday season, the revived business launched “Geoffrey’s Toy Box,” a small in-store section with Toys ‘R’ Us products at around 600 Kroger locations around the country. And the news hit former employees hard.

(Clockwise from top left) Madilyn Muniz; Sarah Woodhams; Jeanet Calderon; Ann Marie Reinhart Smith
Courtesy of the subjects

“We have dedicated our lives to this company,” says Madilyn Muniz, who worked at the Bronx Toys ‘R’ Us location for 18 years. “How dare they go out and open Geoffrey’s Toy Box and enjoy those profits?”

“It’s a blatant, disgusting attempt to monetize our nostalgia and people’s childhood memories,” adds Woodhams, the Pennsylvania-based employee. “If they have the money to be bringing this back as a whole new company, they definitely have the money to take care of their employees as they said they would.”

In a statement to Money, a Solus representative said the owners of the Toys ‘R’ Us brand “are now focused on developing plans with the hopes of creating jobs for former Toys ‘R’ Us employees.” A representative from Angelo Gordon declined to comment.

But the fight goes well beyond Toys ‘R’ Us. These employees-turned-activists want to create substantial legislative change to curb the impact of bankruptcy and subsequent liquidation on workers at a time when brick-and-mortar retailers are struggling to compete. Rise Up Retail is now bringing workers from Sears and Kmart under its wing, with the hope that the same thing won’t happen to them. Even with progress and months passed, the work continues.

“I will be one of those that will be fighting ‘til the end,” says Ann Marie Reinhart Smith, who worked at Toys ‘R’ Us for 29 years. “This started out as a fight for severance, but when we found out we had the power to make a difference, it became so much more empowering.”

Ann Marie Reinhart Smith at her home in Durham, N.C.
Photograph by Jeremy M. Lange for Money

Navigating costs without severance pay

After losing her job, Smith found herself in an unexpected quandary. With no more health insurance, she had to make a difficult choice: her husband’s $100 diabetes medication, or a new $250 inhaler for herself.

“At that very moment, whose medication was more important? Obviously, I chose my own husband’s,” Smith, who is 59 years old, says. “Nobody should have to make that decision.”

Before her location closed down, Smith was a store supervisor at a Toys ‘R’ Us in Durham, N.C., where she moved two years ago after decades in Long Island to be closer to her children and grandchildren. After the move, she became the breadwinner between her and her husband, making around $42,000 a year. Now, without a paycheck, she is dipping into their savings to afford expensive but necessary medications.

For Smith and many other former employees, finding a new job isn’t so easy. Yes, unemployment is at its lowest in decades and the job market is strong. But, particularly in the case for older and more experienced workers, jobs with similar pay, benefits, and titles as their Toys ‘R’ Us gigs are hard to come by. And when Smith started working at Toys ‘R’ Us nearly three decades ago, she didn’t have a resume. She had to scramble to make one this summer, navigate the online job application process, and interview for jobs alongside people half her age. Walgreens reached out to her, but the pay for assistant managers and shift leaders was lower than she expected.

“It’s such a process,” Smith says. “The dynamics are different now. It’s been a crazy experience for me.”

It’s been trying for 63-year-old Mary Trell Osman, too. The Ohio-based grandmother was hoping to retire in two years, but she doubts she could find a new job at her age. “It’s not going to be an easy thing to find,” Osman says.

Certainly, it’s been easier for some to find a gig. Some Toys ‘R’ Us employees Money spoke to found jobs with better pay and benefits. Others, like three former employees who worked at a Toys ‘R’ Us location in Bronx, N.Y., for years, found new gigs – albeit ones without full-time hours or as many perks. Those former Bronx employees all work now at Burlington Coat Factory – a job, they said, that wasn’t too hard to find, but is daunting given the retail climate and their experiences this year.

“We’re worried if what happens with the retailer we’re at now goes through the same that that Toys ‘R’ Us did to us,” says Othelia Lyles, who worked at Toys ‘R’ Us for 23 years.

A number of former Toys ‘R’ Us employees are avoiding retail altogether as a result of their tumultuous ending at the company they spent so long at. It’s a risky business as more and more stores shutter – mostly recently Sears and Kmart – and after losing their jobs, stability is a priority.

Elizabeth Marin, who worked for five years at Toys ‘R’ Us in Tigard, Ore., and traveled the country to fight for severance pay, purposefully tried to look for jobs outside of retail. It wasn’t easy; she felt she needed to “dumb down” her resume after she was repeatedly told she was too experienced for certain roles, especially at retailers like Walmart and Target. Now, with a custodial job, she makes a little less than she did at Toys ‘R’ Us – but she’s working under a union contract with regular raises. So, she’s not discouraged.

In retail, “people see us as subpar humans,” she says. “They treat us badly.” Outside of retail, she says she’s happier and now has an employer that supports her activism.

“It’s not just about job security,” she says. “It’s about respect.”

Sarah Woodhams with her 7-year-old daughter, Tabitha Coyle, at their home in Harleysville, Pa.
Photograph by Gene Smirnov for Money

The first holiday without Toys 'R' Us

Now, shoppers and former employees, alike, are entering the first holiday season in decades without Toys ‘R’ Us. The behemoth toy retailer was a go-to holiday shopping destination for parents and grandparents, with toys galore and exclusive products — and it’s unlikely the revitalized Geoffrey’s Toy Box will not replace all that’s missed. After all, Toys ‘R’ Us drove between 10 to 15% of all U.S. toy sales, and the holidays served as its busiest season.

So other retailers are taking advantage of the opportunity. Amazon mailed printed holiday toy catalogs to customers this season, and Target and Walmart are expanding their toy departments. Osman and Smith, former employees at Toys ‘R’ U, both took advantage of the retailer’s liquidation sales and stored toys for months to reveal for the holidays.

“I have grandchildren now and want to be able to go shopping,” says Smith, who was babysitting her grandchildren at the time of the interview. “It has definitely been a strain — especially with the holidays.”

There’s a sense of relief and palpable joy for some employees who have not spent Thanksgiving with their family in decades. But there’s also the sore loss of added income that helped pay for gifts and bills this time of the year.

Claude, the New Jersey-based employee who worked for Toys ‘R’ Us for more than three decades, feels a bit of both. Her husband had to pick up a second job for them to make ends meet. After months of searching, Claude secured a gig as a store manager at Dollar Tree. Her training for the position took her to Pennsylvania right as this year’s holiday season got underway, and, while she already feels at home with the new retailer, she imagined she would once again be absent from Thanksgiving dinner this year. That was until the woman training Claude gave her the holiday off.

“She said, ‘I know you worked at Toys ‘R’ Us; I know you never had a Thanksgiving,’ and she told me to take it off,” says Claude, through tears.

The day off is particularly meaningful for her this year: Nov. 23, or Black Friday, is Claude’s mother’s birthday. (Her mother had Alzheimer's and has since passed away.) Claude is not quite sure of her plans yet – she could go to her daughter’s house, or have a quiet dinner at her home with her husband. “Just to have the day off is a true blessing,” she says. “I finally feel like I can move on now.”

Moving on takes time, and comes at a different pace for the 33,000 former Toys ‘R’ Us employees. Feelings of frustration, anger, disbelief, and fear still rage on. But as this collective loss impacted each former Toys ‘R’ Us employee in differing ways, many of them found their voice. Woodhams, like Claude, found it in fighting for severance pay and working to secure a better future for workers impacted by corporate bankruptcies. Although she is still struggling to find a day job, she has hope. Stepping into activism for the first time has helped her navigate this traumatic period of her life. And now, she has another baby on the way.

“I’m finally doing something instead of just sitting here and being upset and angry,” Woodhams says. “When I lost everything, suddenly, I have purpose again.”