Cut 2,350 jobs! Macy's announces new layoff plan

It is learned that Macy's Co., Ltd. plans to cut 2,350 jobs and close five stores to reduce costs, improve efficiency and meet changing consumer and market demands.

According to the Wall Street Journal, the layoffs will begin on January 26, and will account for approximately 13% of Macy's total employees and 3.5% of the total workforce. This is to reduce costs, eliminate management levels and redirect spending to enhance customer shopping experience.

"We have made the difficult decision to reduce our overall workforce to become a leaner company as we deploy new strategies to meet evolving consumer and market needs," a Macy's spokesperson said in a statement.

The layoffs come amid a still-volatile landscape for retailers as rising prices for groceries and other basic items discourage inflation-stricken shoppers from spending elsewhere. Retailers, in turn, have had to cut prices to sell unpopular items.

Meanwhile, a Macy's spokesperson said the store closures are an effort to "reposition our store portfolio and evaluate suitable locations within and outside of malls," adding that the five stores will close this year. As of October 28, 2023, Macy's will have 784 stores, including its namesake stores and stores under the Macy's-owned Bloomingdales brand.

Notably, Macy's is also facing a nearly $6 billion takeover bid from an investor group that wants to take the retailer private, as company president Tony Spring prepares to take over from CEO Jeff Gennette next month.

Despite strong and substantial progress over the past few years, Macy's is still under pressure and plans to develop a more automated supply chain and outsource some work.

Macy’s will “invest in areas that impact consumers,” such as adding more visual display managers to improve the look of its stores and upgrading digital capabilities for a smoother online shopping experience, according to the people.

All of that adds up to a cost-cutting environment this year that some analysts expect companies to turn more broadly to technology to protect profit margins. To that end, retailers are leaning on technology in particular, through online shopping and digital advertising, to counter the disruption to consumer demand for discretionary goods caused by pandemic-era inflation.

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