Macy’s is cutting 3,900 jobs in a restructuring that aims to right-size the company for its post-pandemic future.
Expected to recoup $630 million in annual savings, the move comes after CEO Jeff Gennette said the iconic retail operator would emerge from the coronavirus crisis as a smaller, slimmed-down company.
While the 3,900 layoffs will hit corporate and management headcount, the company also has trimmed staffing across its store portfolio, supply chain and customer support network. Macy’s said most of its “remaining furloughed” employees will return starting July 5. The retailer temporarily laid off roughly 130,000 staff at the onset of the pandemic.
In a statement, Gennette said Macy’s store reopenings are “going well.” Because a full recovery will take some time, “we are taking action to align our cost base with our anticipated lower sales,” he added. “We know that we will be a smaller company for the foreseeable future, and our cost base will continue to reflect that moving forward. Our lower cost base combined with the approximately $4.5 billion in new financing will also make us a more stable, flexible company.”
According to a source, Macy’s told employees in an email Thursday morning that the restructuring impacted every area its business to align with the realities of business post-COVID-19. The email also indicated that the last day for departing staff will be June 30. A second source said many of the affected staff are likely in middle management, and the company could further shuffle the deck to consolidate roles and responsibilities at the store level, and even reconfigure the total number of regional territories.
Macy’s said the restructuring will save approximately $365 million in fiscal 2020 alone, which began in February. “These savings will be additive to the anticipated $1.5 billion in annual expense savings announced in February, which the company expects to fully realize by year-end 2022,” it added.