The Wall Street Journal reported Thursday that department store chain Macy's Inc. It plans to cut 2,350 jobs and close five stores, as the company tries to limit expenses, embrace more technology and meet the demands of what it described as an “ever-changing consumer.”
Discounts of up to about 13% from Macy's M,
The newspaper said that the company's employees, and 3.5% of its employees in general, are part of efforts to reduce costs, eliminate layers of management, and redirect spending towards improving the shopping experience for customers. The dismissals will begin on January 26, according to a memo sent to employees cited by the publication.
“As we prepare to deploy a new strategy to meet ever-changing consumer and market needs, we have made the difficult decision to reduce our workforce by 3.5% to become a more streamlined company,” a Macy's spokesperson said in a statement to MarketWatch.
Some analysts expect companies to turn more broadly to technology amid cost cuts this year to protect profit margins, as those margins decline collectively from the highs reached in 2021. To this end, retailers in particular have relied on technology. – Via online shopping and digital advertising. — and store closures as pandemic-era inflation has increased consumer demand for discretionary goods.
Macy's is also facing a nearly $6 billion takeover bid by an investor group looking to take the retailer private. Meanwhile, company president Tony Spring is preparing to succeed Jeff Gennette as CEO next month.
The job cuts were announced at a time when the landscape remains uneven for retailers, with rising prices for groceries and other essentials crippling what inflation-hit shoppers can spend elsewhere. In return, retailers were forced to lower prices to sell unwanted items.
Messi's memo quoted by the newspaper said: “Despite the strong and tangible progress we have made over the past few years, we are still under pressure.”
The publication reported that Macy's plans to develop a more automated supply chain and outsource some functions. Citing a person familiar with the matter, the newspaper said the company “will invest in areas that impact consumers,” such as adding more visual display managers to improve the look of its stores and updating digital functions for more seamless online shopping. expertise.
A Macy's spokesperson told MarketWatch that the store closings were part of an effort to “reposition our store portfolio and evaluate the right mix of on- and off-mall locations,” adding that the five stores will close this year. As of October 28, Macy's had 784 stores, including its namesake locations as well as Bloomingdales locations, which Macy's owns.
The spokesman declined to discuss additional details reported by the newspaper.
Nike Inc.,
It said last month that it was looking to cut costs by up to $2 billion over the next three years. Like Macy's, Nike, which operates its own stores and sells sports equipment online, said it would focus on reducing layers of management, boosting automation and “improving supply chain efficiency.”
Elsewhere, CVS said last week it would close some of its Target Corp. pharmacies. TGT,
Stores, as part of the pharmacy and health services company's “plan to reorganize our national retail footprint.” Meanwhile, Target said in September it would close nine stores in four states, citing organized theft and retail safety. However, some observers suspect that retailers are using theft as an excuse to hide deep financial struggles and other issues.
Macy's shares rose 0.2% in after-hours trading on Thursday, after rising 0.4% during trading today.
