In a strategic move to cut costs and enhance the overall shopping experience, Macy’s, the renowned department store chain, is reportedly planning to lay off approximately 2,350 employees and shutter five stores. According to a report in The Wall Street Journal (WSJ), this reduction represents 3.5% of Macy’s total workforce, excluding seasonal hires.
The initiative, outlined in an internal memo circulated to employees on Thursday, is part of a broader plan to reallocate funds toward improving customer-centric aspects of the business. The memo details a goal to dismiss 13% of the corporate staff, with a focus on streamlining operations and incorporating more automation into the supply chain.
Macy’s aims to invest the saved resources in strategic areas that directly impact consumers. Plans include adding more visual display managers to enhance the aesthetics of stores and upgrading digital functions to make online shopping more seamless. The company has not specified the roles that will be outsourced or automated as part of this restructuring.
This decision comes ahead of Tony Spring’s assumption of the role of CEO from Jeff Gennette next month. The move is seen as a response to ongoing pressure from activist investors who have initiated a $5.8 billion buyout bid for the department store chain.
In a statement to PYMNTS, a Macy’s spokesperson mentioned, “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 workforce by 3.5% to become a more streamlined company.”
The job cuts are part of a broader trend, with various companies, including Google, announcing layoffs in recent times. Macy’s, however, seeks to maintain a consumer-focused approach even amid economic uncertainties. The U.S. economy is showing signs of a “soft landing,” and consumer spending remains robust, especially during the recent holiday season.
Macy’s plans to divulge more details about its new strategy under Spring’s leadership in the upcoming weeks. Alongside the workforce reduction, the company also intends to trim management layers to facilitate quicker decision-making processes. Additionally, Macy’s has announced plans to open up to 30 small-format stores, tripling the current number, as part of its ongoing adaptation to market dynamics.
As the department store giant navigates these changes, the focus remains on balancing cost-cutting measures with investments that enhance the overall shopping experience for its customers.
Macy’s is laying off about 3.5% of its workforce ahead of the departure of longtime CEO Jeff Gennette, as the department-store operator retrenches amid lower demand https://t.co/LBmyYuarKn
— Bloomberg (@business) January 18, 2024