Macy's Is Cutting Jobs and Closing Locations Amid a Leadership Shakeup — Is Your Local Store on the Chopping Block? The retail giant is laying off approximately 2,350 corporate employees.
By Amanda Breen
Key Takeaways
- Macy's will shutter five store locations and introduce more automation in supply chains.
- The changes align with consumer research and incoming CEO Tony Spring's new leadership.
Macy's Inc. is making some major changes to its leadership and operations in 2024.
The department-store chain is laying off around 2,350 corporate staff members — 13% of its corporate workforce — and closing five locations in an attempt to streamline costs and refocus resources on enhancing the consumer shopping journey, The Wall Street Journal reported.
Related: Target to Cut Thousands of Jobs as It Seeks to Trim Costs by $2 Billion
Macy's overall workforce will see a 3.5% reduction, excluding seasonal hires, as the company looks to introduce more automation to its supply-chain operations and outsource some roles to third-party providers. Additionally, tiers of management will be reduced to improve efficiency.
The department-store behemoth, also the parent company to Bloomingdale's and Bluemercury, plans substantial investments in customer-facing areas. Soon, Macy's stores will feature more visual display managers to boost store aesthetics and digital improvements for a smoother online shopping experience, per the report.
This reorganization comes ahead of Tony Spring's ascension to CEO, succeeding Jeff Gennette next month. Macy's faces not just transitional leadership but also considerable pressure from activist investors who have publicized a $5.8 billion takeover offer.
"The buyout group is undoubtedly interested in Macy's large real estate portfolio, which has attracted activists and potential buyers in the past," Morningstar analyst David Swartz said in a note reported by Reuters.
According to JPMorgan analysts, Macy's total real estate value is estimated at approximately $8.5 billion, or $31 per share, including its Herald Square property worth about $3 billion, per the outlet.
Related: The Full List of Major U.S. Companies Slashing Staff Next Year, from Nike to Intel
While Macy's has not publicly addressed the buyout bid, more details on its new strategy are expected in the coming weeks, per WSJ.
The changes will take effect on January 26 and include the sales of two furniture locations and store closures in Ballston Quarter, Arlington, Virginia; Bayfair Center, San Leandro, California; Kukui Grove Center, Lihue, Hawaii; Simi Valley Town Center, Simi Valley, California; and Governor's Square, Tallahassee, Florida.
The wave of layoffs at Macy's is part of a broader trend witnessed in early 2024, with peers such as Google, Amazon, and Citigroup also streamlining their workforce. However, this occurs against a backdrop of a potential "soft landing" for the U.S. economy, as inflation shows signs of easing, and sectors like retail continue to demonstrate growth — albeit at a moderate pace compared to pre-Covid patterns, according to the outlet.
