Macy’s plans to cut 2,350 jobs and close 5 stores

Macy's plans to cut 2,350 jobs and close 5 stores

Macy’s, the nation’s largest department store operator, told employees on Thursday that it is laying off 13 percent of its corporate workforce. The move comes as the company prepares to unveil a new strategy that will be overseen by its incoming chief executive.

The cuts represent approximately 2,350 jobs, or about 3.5 percent of the company’s total workforce, including employees at subsidiaries Bloomingdale’s and BlueMercury. The layoffs will be done by eliminating some roles and consolidating teams, according to the memo seen by The New York Times.

The company also said it would close five of its more than 560 Macy’s stores.

The memo said the decisions were based on consumer research and were meant to make the retailer more competitive by improving its cost structure and making faster decisions.

The cuts were first reported by the Wall Street Journal.

Tony Spring will take over as Macy’s chief executive next month, succeeding company veteran Jeff Gennett, who is retiring after holding the position since 2017. Mr. Spring, who ran Bloomingdale’s, was named to the top job in March and has led a research effort with Adrian Mitchell, Macy’s chief financial officer and chief operating officer.

The company said it will unveil its broader strategy in the near future.

“As we prepare to deploy a new strategy to meet continually changing consumer and marketplace needs, we are reducing our workforce by 3.5 percent to become a more streamlined company,” a Macy’s spokesperson said in an email. Have made a difficult decision to do.” statement.

In a memo to employees, the company said it would be “offshoring certain areas of the business”, but did not provide details.

As consumers have spent less on apparel and discretionary items last year, Macy’s has struggled to grow its sales, and it faces pressure to improve its business. In December, an investor group submitted a $5.8 billion bid to take the company private, more than $1 billion above its market value at the time.

The share price has risen more than 50 percent in the past two months, but remains lower than it was a year ago or at the beginning of the pandemic.

“Clearly Macy’s needs to keep investors satisfied, and its focus on profit has been accomplished at a time when sales performance has been extremely weak,” Neil Saunders, managing director of research and consulting firm GlobalData Retail, said in an email Thursday. Is.” “However, this strategy comes with an expiration date; “Ultimately, no retailer can be limited to success.”

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