Macy’s, the nation’s largest department store operator, is embarking on a significant restructuring plan, involving the layoff of 13% of its corporate workforce, or roughly 2,350 jobs, which constitutes about 3.5% of its total workforce, including its subsidiaries Bloomingdale’s and Bluemercury. This strategic shift is happening amidst a challenging retail environment and as the company prepares for a leadership transition with Tony Spring set to replace Jeff Gennette as CEO next month.
The layoffs, aimed at streamlining operations and enhancing competitiveness, are part of a broader strategy to respond to evolving consumer preferences and market dynamics. Macy’s plans to close five of its over 560 stores located in Arlington, VA; San Leandro, CA; Lihue, HI; Simi Valley, CA; and Tallahassee, FL. These decisions stem from extensive consumer research and are intended to improve Macy’s cost structure and expedite decision-making processes.
In addition to these changes, Macy’s is looking to invest in areas that directly affect consumers. This includes an emphasis on enhancing in-store visual displays and upgrading digital functionalities for a more seamless online shopping experience. The company is also considering automating its supply chain and outsourcing certain business areas, although specific roles have not been disclosed.
This restructuring comes at a time when Macy’s is facing external pressures, including a $5.8 billion buyout bid from activist investors. The company’s strategy under Spring’s leadership, yet to be detailed, aims to address these challenges while meeting the shifting demands of today’s consumers.
These moves by Macy’s reflect broader trends in the retail sector, as companies adapt to changing shopping habits and economic pressures. The restructuring is part of a wave of job cuts in early 2024 by major companies, including Google, Amazon, and Citigroup, despite indications of a potential ‘soft landing’ for the U.S. economy rather than a full-blown recession.
