In a significant blow to the US retail sector, Macy‘s has announced plans to close five stores and cut approximately 2,350 jobs representing 3.5% of its workforce. The decision conveyed through an employee memo follows the confirmation of Macy’s President Tony Spring succeeding Jeff Gennette as the CEO. Activist investors are adding pressure with a $5.8 billion takeover offer while Macy’s intends to outsource roles introduce more automation and streamline management decisions.
Workforce Reduction and Strategic Changes
Macy’s, a major US retailer plans a workforce reduction of 2,350 positions excluding seasonal hires and the closure of five stores across the country. The decision comes amidst pressure from activist investors and a leadership transition with Tony Spring taking over as the new CEO.
The employee memo highlights Macy’s intention to outsource roles incorporate more automation into the supply chain and streamline management decisions. The company aims to upgrade digital functions enhance visual displays and make strategic changes to remain competitive in the evolving retail landscape.
Despite recent economic optimism, Macy’s justifies the layoffs as measures to meet expectations and drive consistent growth. The company has not responded publicly to the activist investors but plans to discuss these significant changes under the new leadership during the upcoming earnings report next month.
Retail Sector Challenges and Industry-Wide Layoffs
Macy’s joins a list of major companies initiating significant layoffs at the start of 2024, including Google, Amazon and Citigroup. The retail giant’s decision to close stores and cut jobs reflects broader challenges faced by the industry despite predictions of a rising US economy and slowing inflation.
The specific stores slated for closure include locations in Arlington, Virginia; San Leandro, California; Lihue, Hawaii; Simi Valley, California; and Tallahassee, Florida. Macy’s, which also owns Bloomingdale Department stores and Bluemercury makeup and skincare stores remains a prominent player in the US retail landscape.