Why Macy’s Is Cutting Thousands of Jobs

  • Why Macy’s Is Cutting Thousands of Jobs

Why Macy’s Is Cutting Thousands of Jobs

The company will reduce corporate and management headcount by approximately 3,900.

The COVID-19 pandemic has led to a number of bankruptcy filings in the retail sector.

Macy's (NYSE:M) announced Thursday it is laying off 3,900 corporate jobs in a move to cut costs as its business has been hurt by the coronavirus pandemic.

Macy's said it expects the layoffs to provide about $365 million in cost-savings in fiscal 2020, about $630 million on an annualized basis. "These were being challenging decisions as they affect numerous of our colleagues".

Gennette thanked his departing colleagues for their service to the company, as well as those who had continued working during the lockdown and those still on furlough.

"We look forward to welcoming back many of our furloughed colleagues the first week of July", Gennette said.

"We know that we will be a smaller company for the foreseeable future, and our cost base will continue to reflect that moving forward".

For fiscal 2020, the company expects pre-tax costs of approximately $180 million for these restructuring activities, the majority of which will be recorded in the second quarter and all of which will be in cash.

Meanwhile, as a number of U.S. department store chains had been witnessing a havoc-scale plunge in demands despite a reopening of the economy, adding that the struggling United States retailers would likely to follow the Macy's Inc.'s footprint in a near-future, the founder of Ithaca Wealth Management in New York, Matt Fox said following Macy's Inc.

Macy's had in May warned of almost $1 billion in operating losses in its first quarter and said it would turn into a "smaller company".

Macy's latest announcement, analysts say, shows that retail job cuts - which until now had been largely concentrated among store employees and hourly workers - are beginning to reach white-collar positions in office buildings.