Macy’s lays off 13% of employees, closes 5 stores as retail technology revolutionizes
Department store chain Macy’s Inc. plans to lay off 2,350 employees and close five stores as it reins in costs, embraces more technology and “meets the ever-changing needs of consumers and consumers,” according to Wall Street. The Journal reported Thursday. market.”
Macy’s M’s cut of about 13% is
The company’s employees and 3.5% of its total workforce are part of an effort to cut costs, eliminate layers of management and shift spending toward improving customers’ shopping experience, the Journal said. Layoffs are scheduled to begin Jan. 26, according to a memo sent to employees cited in the publication.
“We made the difficult decision to reduce our workforce by 3.5% to become a more efficient company as we prepare a new strategy to meet the ever-changing needs of consumers and markets,” a Macy’s spokesperson said in a statement to MarketWatch.
Some analysts had expected companies to turn to technology more broadly this year amid cost-cutting efforts to protect profit margins. This is because these margins are overall down from the highs reached in 2021. To achieve this, retailers in particular have relied on technology through online shopping and digital advertising. — The store closures come as pandemic-era inflation increases consumer demand for discretionary goods.
Macy’s is also facing a nearly $6 billion takeover bid from a group of investors seeking to take the retailer private. Meanwhile, company President Tony Spring is preparing to succeed Jeff Gennette as CEO next month.
The job cuts were announced as the retail environment remains choppy as rising prices for groceries and other staples leave inflation-hit shoppers with less money to spend elsewhere. As a result, retailers have had to cut prices to sell unwanted items.
“Despite our strong and visible progress over the past several years, we remain under pressure,” the Macy’s memo quoted in the Journal reads.
The publication reported that Macy’s plans to develop a more automated supply chain and outsource some tasks. Citing a person familiar with the matter, the Journal said the company would “invest in areas that impact consumers,” including adding more visual display managers to improve store appearance and upgrading digital features to make online shopping more seamless. said. experience.
A Macy’s spokesperson told MarketWatch that the store closures are “part of an effort to reposition our store portfolio and evaluate the right mix of in- and off-mall locations,” adding that five stores will close this year. As of October 28, Macy’s had 784 stores, including stores of the same name as Macy’s-owned Bloomingdale’s stores.
A spokesperson declined to discuss further details reported by the Journal.
Nike Inc.,
Last month it said it planned to cut costs by up to $2 billion over the next three years. Nike, which, like Macy’s, operates its own stores and sells sportswear online, said it would reduce layers of management, increase automation and focus on “improving supply chain efficiency.”
Elsewhere, last week CVS traded to Target Corp. TGT said it would close some of its pharmacies.
The stores are part of the pharmacy and health services company’s “plan to reshape its national retail presence.” Meanwhile, Target said in September it would close nine stores across four states, citing organized theft and retail safety concerns. But some observers suspected that retailers were using the theft as an excuse to hide deeper financial difficulties and other problems.
Macy’s shares rose 0.2% in the after-hours on Thursday, after rising 0.4% in intraday trading.
