Macy’s to cut 7,000 jobs
By John Eckberg
Hurt by weaker than expected holiday receipts and facing a customer that has stopped spending on luxuries, Macy’s Inc. today announced it will lay off 7,000 employees, reconfigure its management structure and pare a dividend.
The company expects to save $250 million in 2009 and $400 million in 2010 as it expands a “My Macy’s” approach to purchase decisions to all 808 stores.
About 5,100 jobs will be lost in stores.
“We must operate in a responsible manner that allows us to maximize the value we offer,” said Terry J. Lundgren, Macy’s chief executive, in a statement.
The loss of 7,000 positions represents about four percent of the company workforce. Employees who are laid off will be provided severance benefits.
“Reducing our workforce is an unfortunate outcome of the current economic environment, and I am frustrated that so many of our people will be unable to move forward with us.”
The dividend will be reduced to 5 cents per share from the current 13 cents a share. Cutting the divided is expected to save the company $138 million in 2009.
Cincinnati may get an uptick in the number of jobs here from the changes, officials said.
Macy’s, the downtown Cincinnati-based retailer, also owns Macys.com and 40 Bloomingdale’s stores.
The cuts come as U.S. consumers have wallets and purses in a lockdown. Spending fell one percent in December. It was the sixth time in seven months, despite lower fuel prices, that spending has plummeted, according to a report from the U.S. Commerce Department.
The cuts mirror layoffs from 2008 when 2,300 employees were fired.
Macy’s, Inc. reported sales of $4.4 billion for the five weeks ended Jan. 3, a decrease of 4.7 percent compared with total sales of $4.6 billion in the five weeks ended Jan. 5.
On a same-store basis, Macy’s, Inc. sales were down 4 percent in December and same-store sales were off 7.5 percent for November and December.
Shares in Macy’s stood at $9.05, up 10 cents or 1.1 percent, in afternoon trading.
Leave a comment