Home Depot is planning to reduce its costs by approximately $500 million the company said during a June 13, 2023, investor meeting. The cuts are expected to come from a number of places, which the company has declined to specify, but will include supply chain operations, Home Depot said.

By reducing its operational capacity, the organization believes it will remain on track for its earnings guidance from this quarter, which will see 2023 sales decline by 2% to 5% from 2022.

The home improvement giant said that it built out its supply chain capacity in 2020 and 2021 to absorb “unplanned growth” brought on by the COVID-19 pandemic. Now, the organization has begun "gradually reducing that holding capacity" as its transactions begin to normalize, said Home Depot’s EVP and CFO, Richard McPhail. 

“We view 2023 as a year of moderation after several years of unprecedented growth in the home improvement market,” said McPhail. “While we have managed through this period of moderation, we are committed to strong stewardship of our profits and losses.”