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Macy’s
is laying off 3.5% of its workforce, the company said Thursday, as the company looks to cut costs and reorganize its corporate structure.
Roughly 2,350 employees were let go. Most of those roles were within Macys’ corporate division.
“After nearly a year of intensive, far ranging consumer research, we’re repositioning our business to both better meet consumer expectations and generate consistent growth,” a company spokesperson said in an email to Barron’s.
As part of the reorganization,
Macy’s
will close five stores over the course of 2024, in addition to two furniture stores the company plans to sell, according to a letter sent to employees Thursday and reviewed by Barron’s. Plans to open 30 new small-format Macy’s locations through the fall of 2025 remain under way, the letter said.
The new structure aims to funnel investments around three new principles, the spokesperson added, including modernizing workflows and enhancing the customer experience. Some of these efforts include moving certain roles offshore, as well as investing in automation across the company’s supply chain, according to the letter.
The company also plans to reduce layers of management, aimed to streamline decision-making and remove duplicate positions, the letter said.
The move comes just a few weeks before current CEO Jeff Gennette steps down and hands over the reins to CEO-elect Tony Spring. Under Genette, Macy’s embarked on an ambitious three-year plan aimed to improve the company’s financials and turn the business around. At the time, Macy’s laid off 3,900 employees in a bid to again cut costs. Those layoffs were estimated to save the company $365 million in annual costs. Macy’s hasn’t given any details into the financials of the current round of layoffs.
“This work laid the foundation for us, and now we must evolve our cost structure to support our strategic plans in 2024 and beyond,” reads the letter.
Macy’s past revamp plan has started to pay off, analysts say, but the company isn’t out of the woods yet. Many economists believe consumer spending will slow, and department stores such as Macy’s are on particularly rocky footing. Department store spending jumped 3% in December from November, but was still 2.7% lower when compared with 2022.
In December, The Wall Street Journal reported that an investor group had made a $5.8 billion offer to buy Macy’s, which at the time represented a premium of over 30% to where shares closed before the news broke.
Macy’s shares ticked down 0.1% Thursday to $17.92 in after-hour trading. The stock has shed 11% this year, and 21% over the last 12 months.
Write to Sabrina Escobar at [email protected]
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