Macy’s, Inc. is laying off 13% of its corporate workforce, amounting to approximately 2,350 jobs, and plans to close five stores as incoming CEO Tony Spring prepares to take the reins. The cuts are part of a new strategy that Spring will implement when he takes over from current CEO Jeff Gennette next month, multiple sources report, citing internal Macy’s memos.
The job cuts amount to 3.5% of the company’s total workforce, excluding seasonal hires, and also include employees at Bloomingdale’s and Bluemercury. Additionally, two furniture locations will be sold and five stores will be closed, in Ballston Quarter, Arlington, Va.; Bayfair Center, San Leandro, Calif.; Kukui Grove Center, Lihue, Hawaii; Simi Valley Town Center, Simi Valley, Calif.; and Governor’s Square, Tallahassee, Fla., according to the Wall Street Journal.
“Despite our strong and tangible progress over the last few years, we remain under pressure,” Gennette and Spring wrote in the memo, which also said that the cuts are in response to nearly a year of consumer research into ways “to both better meet their expectations and to generate consistent growth.”
Among the organizational changes planned in line with the cuts are adding more automation to the company’s supply chain and outsourcing some roles, although which roles were not specifically outlined. The company also is working to remove management layers in order to speed decision-making and plans to invest more in areas that have a direct impact on the customer experience, such as adding more visual display managers to enhance the look of stores and upgrading digital functions to make online shopping more seamless, an executive told WSJ.
“As we prepare to deploy a new strategy to meet the needs of an ever-changing consumer and marketplace, we made the difficult decision to reduce our work force by 3.5% to become a more streamlined company,” a Macy’s spokesman said in a statement emailed to The New York Times.
Despite working diligently on a turnaround for several years, net sales in Q3 2023 were down 7% compared to the same period in 2022, to $4.9 billion, with the Macy’s banner specifically reporting 7% declines in both brick-and-mortar and digital sales during the period. The company’s continued poor performance prompted a bid from a group of investors to buy out the company and take it private in December 2023. Macy’s is set to report on its Q4 2023, reflecting the all-important holiday season, next month.
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