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

Macy's, the nation's largest department store operator, told employees Thursday that it has laid off 13 percent of its corporate workforce. The move comes as the company prepares to unveil a new strategy, which will be overseen by the new CEO.

The cuts amount to roughly 2,350 jobs, or about 3.5 percent of the company's total workforce, including employees of its Bloomingdale's and Bluemercury subsidiaries. The layoffs will be accomplished by eliminating some positions and consolidating teams, according to memos obtained 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 intended to make the retailer more competitive by improving its cost structure and encouraging 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 from Jeff Gennette, a company veteran who is retiring after holding the position since 2017. Mr. Spring, who led Bloomingdale's, was named to the top position in March and has led an investigative effort alongside Adrian Mitchell, the chief financial officer and chief operating officer at Macy's.

The company said it would unveil 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 have made the difficult decision to reduce our workforce by 3.5 percent to create a more streamlined business ,” a Macy's spokesperson said in an email. rack.

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

As consumers have spent less on clothing and durables over the past year, Macy's has struggled to grow sales and is under pressure to improve its operations. In December, an investor group submitted a bid to take the company private for $5.8 billion, which was more than $1 billion above its market value at the time.

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

“Macy's obviously needs to keep investors happy, and its focus on profits has accomplished that at a time when sales performance has been extremely lackluster,” Neil Saunders, managing director of research and consulting firm GlobalData Retail, said by email Thursday. “However, this strategy has an expiration date; Ultimately, no retailer can retreat from success.”