The department store chain announced Thursday that Macy’s is cutting 2,350 jobs and closing five stores.
The layoffs make up 3.5 percent of Macy’s overall workforce. The company operated 722 store locations as of January 2023 and employed 94,570 full- and part-time employees, excluding seasonal hires.
Stores will be shuttered in Arlington, Virginia; San Leandro, California; Lihue, Hawaii; Simi Valley, California; and Tallahassee, Florida.
“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,” Macy’s said in a statement reported by CNBC.
The job cuts were first reported by the Wall Street Journal, which, citing a memo sent to employees, said the layoffs would occur on Jan. 26.
The memos said the decisions were based on consumer research and were meant to improve the company’s cost structure and drive faster decision-making.
The decision to cut jobs and close stores comes when an investor group consisting of Arkhouse Management and Brigade Capital put pressure to take Macy’s private in a $5.8 billion buyout offer.
Macy’s incoming CEO, Tony Spring, is also focused on cutting expenses on promotions to boost margins as the company recovers from an inventory glut in 2022.
Macy’s will be investing in areas that impact consumers, such as adding more visual display managers to enhance the look of stores and upgrading digital functions to make online shopping more seamless, the WSJ reported.
Layoffs Across Other industries
Macy’s joins other large companies to announce job cuts in 2024 to reduce costs amid a tough economy with increased inflation and interest rates.On Friday, home goods and furniture retailer Wayfair announced layoffs affecting 1,650 employees following a pandemic-fueled hiring spree.
“I think the reality is that we went overboard in hiring during a strong economic period and veered away from our core principles, and while we have come quite far back to them, we are not quite there,” Wayfair CEO and Co-Founder Niraj ShahShah wrote to employees.
“The best way to make sure everyone in the company can thrive and that we can do the most for our customers is to make sure that we make the right decision in terms of what our go-forward organization should look like. While our focus today is on our people, I want to spend some time explaining how we got here and the thinking we used to make these decisions.”
Amazon’s livestreaming platform, Twitch, also announced earlier this month it was slashing 35 percent of its workforce as part of ongoing efforts to make the business more “sustainable” and “efficient.” Amazon is also cutting jobs in its Prime Video and Amazon MGM Studios divisions. The company has laid off around 26,000 workers since late 2022 as part of cost-cutting measures.
