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Saturday, June 15, 2024

Macy’s Announces Layoffs of 2,350 Employees and the Closure of 5 Stores

Macy’s, the largest department store operator in the United States, announced on Thursday that it would be laying off 13 percent of its corporate workforce as it prepares to unveil a new strategy under its incoming chief executive. The layoffs, totaling about 2,350 jobs, represent approximately 3.5 percent of Macy’s overall workforce, including employees at its subsidiaries Bloomingdale’s and Bluemercury. The company will also close five of its more than 560 Macy’s stores.

The decision to cut jobs and close stores is part of a broader effort to make the retailer more competitive by improving its cost structure and streamlining decision-making processes, according to memos seen by The New York Times. The company stated that the decisions were based on consumer research.

The cutbacks come as Tony Spring is set to take over as Macy’s chief executive next month, succeeding Jeff Gennette, who is retiring after holding the position since 2017. Spring, who previously ran Bloomingdale’s, was appointed to the top position in March and has been conducting research alongside Adrian Mitchell, the chief financial officer and chief operating officer at Macy’s.

In an internal memo to employees, the company mentioned plans to “offshore certain areas of the business,” without providing specific details.

Macy’s has faced challenges as consumer spending on apparel and discretionary items has declined over the past year. The company has struggled to boost its sales and has been under pressure to enhance its business. In December, an investor group submitted a bid to take the company private at $5.8 billion, exceeding its market value at the time by more than $1 billion.

While Macy’s share price has increased more than 50 percent over the last two months, it remains lower than it was a year ago or in the early stages of the pandemic.

The restructuring at Macy’s reflects broader challenges faced by traditional department stores in an evolving retail landscape. The rise of e-commerce and changing consumer preferences have prompted these retailers to reevaluate their strategies and adapt to new market dynamics. Macy’s, like other traditional retailers, is working to find the right balance between physical stores and digital channels while optimizing its operational efficiency to remain competitive in the evolving retail environment.

The retail industry continues to undergo transformations accelerated by shifts in consumer behavior, technological advancements, and the impact of the COVID-19 pandemic. Retailers must navigate these changes strategically to stay relevant, enhance the customer experience, and sustain profitability. Macy’s move to streamline its workforce and close certain stores reflects its commitment to adapting to the evolving retail landscape and addressing the challenges posed by recent market dynamics.

David Faber
David Faber
I am a Business Journalist of The National Era
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