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Macy's in cost cutting mode; 2, 500 jobs at risk

RBR Staff Writer Published 09 January 2014

American department store chain operator Macy's, which is struggling to regain profitability, plans to slash about 2,500 jobs as part of its cost cutting measures.

Macy's

The retailer intends to implement cost reduction initiatives as it focuses to sustain the profitable sales growth in the years ahead, which is estimated to generate annual savings of about $100m starting from 2014.

Besides lay offs, the company will continue to add positions in other parts - such as in online operations, direct-to-consumer fulfillment and new stores - leaving workforce level at 175,000.

Further, Macy's also announced closure of five of its stores by early spring 2014, while eight new and replacement Macy's and Bloomingdale's stores are currently planned and are under construction.

Macy's chief executive Terry Lundgren said the company has significantly increased sales and profitability over the past four years.

"We began five years ago with a set of business strategies that were largely untested by a national retailer of our size and scope. As the success of these strategies has unfolded, we have identified some specific areas where we can improve our efficiency without compromising our effectiveness in serving the evolving needs of our customers," Lundgren added.

Ohio-based Macy's expect comparable sales increase of 2.5% to 3% for the full year 2014.

Image: The Macy's flagship store in downtown Cincinnati. Photo: Courtesy of Derek Jensen (Tysto).