Macy’s has revealed plans to lay off around 13% of its corporate staff, along with closing down five stores, in an attempt to cut costs and redirect spending.
According to an internal memo, revealed by insiders, the job cuts equal around 2,350 positions, or 3.5% of the company’s overall workforce, excluding seasonal hires.
The company also plans to add more automation to the supply chain, outsourcing some roles, however specific roles were not disclosed. Management will also be reduced to speed decision making.
Macy’s claims to be investing in areas that most impact customers, including adding more visual display managers to enhance store appearance, as well as upgrading digital functions to make online shopping easier.
This move comes as President Tony Spring is set to succeed Jeff Gennette as Chief Executive Officer (CEO) next month.
Activist investors, who have launched a $5.8 billion buyout gig, are also putting the chain under pressure.
In a memo, Gennette and Spring said, “Despite our strong and tangible progress over the last few years, we remain under pressure.” It claimed the changes are a response to almost a year of consumer research “to both better meet their expectations and to generate consistent growth.”
A public response has yet to be issued to the activists by the company, with plans to provide more information on a new strategy in coming weeks.
Macy’s is the latest in a growing list of companies cutting jobs early this year. Others include Google, Amazon, and Citigroup.
These layoffs are increasing despite a growing economic sense that the US is heading towards a “soft landing,” instead of a recession as inflation cools.
Over the Christmas period, consumers continued spending, and November-December sales rose 3.8% compared with the same period a year before. It was similar to pre-Covid trends.
Other chains including Lululemon and Abercrombie & Fitch raised financial targets, with sales arriving stronger than expected.
American Eagle Outfitters saw an increase of around 8% through December 30th, for fourth quarter-to-date revenue.
Macy’s hasn’t yet revealed its holiday season performance, but is expected to report earnings next month.
Employees were first notified about the layoffs last week, and were told they would occur January 26th.
In the memo, it was also said that five Macy’s stores would close, and two furniture locations would be sold, with plans of relocation.
