Macy’s Inc. is moving to an “absolute minimum workforce” for the duration of the coronavirus outbreak in the U.S. as the public health crisis is taking a “heavy toll” on its business.
The department store retailer Monday said the majority of its workforce will go on furlough beginning this week. “There will be fewer furloughs in our digital business, supporting distribution centers and call centers so we can continue to serve our customers online,” Macy’s said.
The furloughed employees who are enrolled in health benefits will continue to receive coverage with the company covering 100 percent of the premium at least through May.
“We expect to bring colleagues back on a staggered basis as business resumes,” Macy’s said.
Since March 18, Macy’s, Bloomingdales and Bluemercury stores have been closed, and will remain shuttered indefinitely. President Trump has said the coronavirus outbreak in the U.S. could last until June. Scientific data will help determine if it would be safe to re-open stores earlier.
“While the digital business remains open, we have lost the majority of our sales due to the store closures. We’ve already taken measures to maintain financial flexibility, including suspending the dividend, drawing down our line of credit, freezing both hiring and spending, stopping capital spend, reducing receipts, cancelling some orders and extending payment terms, and we are evaluating all other options,” Macy’s said, adding “While these actions have helped, it is not enough. Across Macy’s, Bloomingdales, and Bluemercury brands, we will be moving to the absolute minimum workforce needed to maintain basic operations.”
Macy’s is the latest in a list of growing retailers making temporary changes and deep cuts to their employee base. Nordstrom Inc., H&M Group, L Brands Inc. and Spanish department store chain El Corte Inglés last week initiated layoffs or furloughs.
On Monday, Stage Stores Inc. said it will begin furloughs this week. And in Canada, Reitmans (Canada) Ltd. said it has temporarily closed all of its 587 stores on a “voluntary” basis to help stop the spread of the virus. The company said it will temporarily layoff 90 percent of its Canadian retail store employees effective March 29 across all five of its brands: Reitmans, Penningtons, Addition Elle, RW&Co. and Thyme Maternity. Furthermore, the layoffs also impact about 30 percent of Montréal head office employees, effective Monday.
“In addition, all remaining employees are being asked to collectively contribute to on-going cost-saving initiatives,” Reitmans said. The company added that it intends to bring back impacted employees back to work as soon as possible.
Reitman’s online business continues to operate through its distribution center in Montréal.
“In our 90+ years’ history, we have never had to turn to such drastic measures as those announced today. We are very saddened by the situation, but also confident that we are doing the right thing to overcome these times of hardship and position ourselves to bounce back as quickly as possible,” Stephen F. Reitman, Reitmans’ president and CEO, said.