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Department-store chain Macy’s Inc. plans to cut 2,350 jobs and close five stores, the Wall Street Journal reported on Thursday, as the company tries to curb expenses and meet the demands of what it said was “an everchanging consumer and marketplace.”
The cuts, which amount to around 13% of Macy’s
M,
corporate staff and 3.5% of its staff overall, are part of an effort to shed costs, eliminate management layers and redirect spending toward improving customers’ shopping experience, the Journal said. The dismissals will begin on Jan. 26, according to a memo sent to employees cited by the publication.
“As we prepare to deploy a new strategy to meet the needs of an everchanging consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5% to become a more streamlined company,” a Macy’s spokesperson said in a statement to MarketWatch.
The spokesperson said that the store closures were part of an effort to “reposition our store portfolio and evaluate the right mix of on- and off-mall locations,” adding that the five stores would close this year.
Shares of Macy’s were up 0.2% after hours on Thursday, after gaining 0.4% in the day’s trading.
The Journal reported that Macy’s plans to develop a more automated supply chain and would outsource some jobs. Citing a person familiar with the matter, the publication said the company would be “investing in areas that impact consumers, such as adding more visual-display managers to enhance the look of stores and upgrading digital functions to make online shopping more seamless.”
The job cuts were announced as the landscape for retailers remains uneven, as higher prices for groceries and other basics have hindered what inflation-hit shoppers can spend elsewhere.
“Despite our strong and tangible progress over the last few years, we remain under pressure,” according to the Macy’s memo cited by the Journal said.
The moves come as Macy’s President Tony Spring prepares to succeed the outgoing Jeff Gennette as the company’s chief executive next month. Macy’s is also facing a nearly $6 billion takeover bid by an investor group that’s looking to take the retailer private.
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