Department store chain Macy’s is cutting approximately 2500 jobs, some 3.5 per cent of its workforce, as part of the strategy to become a more streamlined company.
A spokesperson said the strategy aims to “meet the needs of an ever-changing consumer and marketplace”.
The job cuts were first reported by the Wall Street Journal, citing a memo sent to employees indicating that the layoffs would occur on January 26.
Supply chain automation, some outsourcing and faster decision-making were reportedly among the reasons for the cuts.
The company also plans to shut down five of its full-line stores in California, Florida, Hawaii and Virginia this year, as well as sell and relocate two furniture stores.
“While some pruning of the store estate and good personnel discipline is necessary at any retailer, we cannot help but believe that the latest round of Macy’s cuts is a consequence of poor management and a lack of focus on growing the top line,” said Neil Saunders, MD of GlobalData, responding to the news.
“Macy’s obviously needs to keep investors satisfied, and its focus on profit has accomplished that at a time when sales performance has been extremely lackluster.”
In the long term, Saunders suggested that the company focus on improving the retail experience and bolstering its trading, as the strategy is more sustainable than constant cost-cutting.
Macy’s previously reported net sales of $5 billion for the third quarter, a 7 per cent decrease year on year, attributed to declines in both brick-and-mortar and digital sales. It received a $5.8 billion acquisition offer from an investor group composed of Arkhouse Management and Brigade Capital last month.
