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Nordstrom Said to Be Slashing as Much as 25% of Jobs: Source

Multiple sources say Nordstrom is believed to be shedding jobs, following news of Macy’s 3,900 job cuts earlier Thursday amid a restructuring forced by the pandemic’s crippling economic effects.

Sources said job cuts have been ongoing this month at the Seattle retailer, which lost $521 million in a painful first quarter. Nordstrom has already reported plans to permanently close 19 of its nearly 350 stores, which shut down in March to curb the spread of the coronavirus. At the moment, it isn’t immediately clear how many jobs are on the line or which departments will be affected. But information culled from different sources indicates the cuts could be startlingly deep across the 68,000 full- and part-time staff Nordstrom employed at the close of fiscal 2019—though the company already furloughed some corporate workers in April.

One recruiter said Nordstrom would trim as much as 25 percent of its workforce over the near term. According to another source, across-the-board headcount reductions are ongoing now, with a goal of at least a 20 percent reduction in each department, if not higher. Meanwhile, yet another source said the positions being cut now are in addition to the stores slated to close, meaning that much of the reductions are from its corporate ranks.

Executives at Nordstrom could not be reached for comment. A Nordstrom public relations representative in an e-mail referred to the company’s first-quarter earnings release statement of May 28 for more information. In that statement, president and chief brand officer Pete Nordstrom pointed to the company’s unique mix of assets and flexible business model.

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“In 2019, our off-price and e-commerce businesses accounted for nearly 60 percent of sales. As we anticipate an acceleration of these longer-term customer trends, we’re taking proactive steps to move faster in executing our strategic plans,” he said.

In the May statement, Nordstrom said it continues to invest in its strategy to gain market share and increase inventory efficiencies in its top markets. It noted the strategy in optimizing its physical and digital assets that led to the closing of 16 full-line stores and its three Jeffrey boutique concepts, “in addition to restructuring its regional and corporate support organization to achieve greater agility.”

Store-closing sales at the 19 locations are expected to wind down by the end of August.

Though Nordstrom has reopened 90 percent of its stores, according to a Securities and Exchange Commission filing Wednesday, a source said the store at Long Island’s Roosevelt Field mall was “very, very quiet. Store associates are standing and waiting, and doing nothing.”

The source, a former retail executive who worked for a competitor, said Nordstrom’s famous anniversary sale, which it pushed to August from July, will serve as a barometer on the customer’s appetite to shop and spend. Sales results, the source said, could augur what lies ahead for holiday.

Given the myriad uncertainties surrounding the pandemic—like how long this disruption will last and whether the virus will reverse easing lockdowns—retailers will struggle “to put together a compelling strategic plan,” said Elaine Hughes, who heads the E.A. Hughes division at recruitment firm Solomon Page. COVID-19, she added, is an “invisible adversary that will be the prickly pear for all businesses going forward,” especially if a second wave rears its ugly head come autumn.

With many consumers still skeptical about returning to stores and sales sagging despite executives’ upbeat proclamations to the contrary, many retailers will be forced to “flush out what no longer makes sense,” another source said, resulting in lean-and-mean operations that might have to undergo a merchandising makeover. That could mean out with the stuffy suiting and in with the cozy, couch-ready quarantine staples like loungewear and tie-die T-shirts. Many in the Gen Z and millennial demographics, the source said, care far less about the go-to mainstay fashion categories of dresses, suits and handbags—the traditional tailored work apparel favored by generations in years past. “Home, athleisure and lifestyle clothing are where their attention is at,” this person added.

Retail consultant Walter Loeb echoed the concerns around store safety, noting that “as stores across the country continue to see a wave of COVID-19 infections rise, consumers will not be comfortable going into the stores.”

Loeb sees an onslaught of stores closures of retail layoffs ahead, while merchants will be forced to rely on money-losing promotions, rather than sale events, to move their merchandise.