Macy's, the nation's largest department store operator, told employees Thursday that it would lay 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 CEO.
The cuts amount to about 2,350 jobs, or about 3.5 percent of the company's total workforce, which includes employees at subsidiaries Bloomingdale's and Bluemercury. The layoffs will be accomplished by eliminating some roles and consolidating teams, according to memos seen by The New York Times.
The company also said it would close five of its more than 560 Macy's stores.
The memos said the decisions were based on consumer research and were aimed at making the retailer more competitive by improving its cost structure and driving faster decision-making.
The cuts were first reported by The Wall Street Journal.
Tony Spring will take over as CEO of Macy's next month, replacing Jeff Gennette, a company veteran who is retiring after serving in the role since 2017. Spring, who led Bloomingdale's, was named to the top job in March and has undertaken a research effort. along with Adrian Mitchell, Macy's CFO and COO.
The company said it would reveal its broader strategy in the near future.
“As we prepare to implement a new strategy to meet the needs of an ever-changing consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5 percent to become a more agile company,” said a Macy's spokesperson in an email. statement.
In a memo to employees, the company said it would “offshore certain areas of the business” but did not provide details.
As consumers have spent less on clothing and discretionary items over the past year, Macy's has struggled to grow sales and has been facing pressure to improve its business. In December, a group of investors submitted a bid to take the company private for $5.8 billion, more than $1 billion above its market value at the time.
The stock price has risen more than 50 percent in the past two months, but is still lower than it was a year ago or at the start of the pandemic.
“Macy's obviously needs to keep investors satisfied, and its focus on profits has done so at a time when sales performance has been extremely lackluster,” Neil Saunders, managing director of the firm, said in an email Thursday. GlobalData Retail research and consulting. “However, this strategy has an expiration date; Ultimately, no retailer can be reduced to success.”
