Macy’s is eliminating about a quarter of its corporate workforce, slashing 3,900 white-collar jobs in a sweeping effort to cut costs during the coronavirus pandemic. The layoffs announced Thursday come just months after the beleaguered retailer announced it would close 125 stores — about a fifth of its total — and shed 2,000 positions after a disappointing holiday season. The company also is scaling back staffing at its Macy’s and Bloomingdale’s stores, distribution facilities and customer service centers, but says it will “adjust as sales recover.” The department store chain projected the moves would save it $630 million a year.
The pandemic “has significantly impacted our business,” chief executive Jeff Gennette said in a statement. “While the reopening of our stores is going well, we do anticipate a gradual recovery of business. … We know that we will be a smaller company for the foreseeable future.”
Coronavirus-related store closures have led to a precipitous drop in sales that has roiled the retail industry, which was in trouble long before the pandemic. Six national retailers — including department store chains J.C. Penney and Neiman Marcus — have filed for bankruptcy since May. As many as 25,000 bricks-and-mortar stores are expected to permanently close this year, according to Coresight Research, which will have far-reaching effects on shopping malls, workers, and local communities.
Macy’s latest announcement, analysts say, shows that retail job cuts — which until now had been largely concentrated among store employees and hourly workers — are beginning to reach white-collar positions in office buildings.
“This is a significant number of layoffs and it really underlines the fact that while Macy’s has done a good job of securing financing to see it through this crisis, it is still burning through cash,” said Neil Saunders, managing director at GlobalData Retail. “It is a long-term retrenchment, and an acknowledgment that sales are nowhere close to what they used to be.”
Analysts say Macy’s, though, is in relatively good shape. The probability that it will default on its loans in the coming year has declined from 44 percent in April to 17 percent in June, according to S&P Global Market Intelligence, as stores reopen and sales inch back up. Macy’s has also obtained about $4.5 billion in financing that Gennette said would make it “a more stable, flexible company.”
Todd Horwitz Chief Strategist BubbaTrading.com
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