Macy’s Cuts Workforce 3.5% While Preparing to Deploy New Strategy

Macy’s is reducing its workforce by 3.5%.

“As we prepare to deploy a new strategy to meet the needs of an everchanging consumer and marketplace, we 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 emailed to PYMNTS.

The department store chain plans to cut about 2,350 jobs and close five stores as part of its efforts to reduce costs and enhance the customer shopping experience, The Wall Street Journal (WSJ) reported Thursday (Jan. 18), citing a company memo as well as unnamed sources.

The company aims to redirect spending toward areas that directly impact consumers, such as improving store aesthetics and upgrading digital functions for online shopping, according to the report.

The job cuts represent about 13% of Macy’s corporate staff and are expected to help the company streamline its operations and make more efficient use of resources, the report said. Macy’s is embracing technological advancements in its supply chain by automating certain roles and outsourcing others.

In addition to the layoffs, Macy’s plans to reduce management layers to facilitate faster decision-making processes, per the report.

The decision to cut jobs and close stores comes at a time when Macy’s is facing pressure from activist investors who have launched a $5.8 billion buyout bid for the department-store chain, according to the report. Tony Spring, the current president of Macy’s, is set to succeed Jeff Gennette as CEO next month.

Macy’s is not alone in implementing job cuts, as other prominent companies like Google, Amazon and Citigroup have also taken similar measures, the report said. They are making these moves even as economists suggest that the U.S. economy is heading for a “soft landing” rather than a recession, with consumer spending remaining strong during the recent holiday season.

Macy’s plans to provide more details on its new strategy under Spring’s leadership in the coming weeks as it continues to adapt to changing market dynamics, per the report.

In another recently announced change, Macy’s said in October that it plans to open as many as 30 additional small-format stores. That move would triple the number of such stores operated by the company.