US: Macy’s to axe 2,500 jobs in cost-cutting
Macy's is laying off 2500 workers
Retail giant Macy’s is to lay off some 2,500 workers in a round of cost reductions designed to save the business about US$100m a year.
The company, which also released its 2013 Christmas trading figures yesterday (8 January), is to streamline its organisational structure, combining its existing Midwest and North Regions into one North Central Region, thus cutting the number of regions from eight to seven.
Meanwhile, its stores districts will be reduced from 69 to 60, with nine of them merged with nearby districts.
In addition, five Macy’s stores in Arizona, Kansas, Missouri, New York and Utah are to close, and a number of store positions are to be realigned, combined and reduced.
Macy’s is also to trim central office, administrative and back-office expenses, with all the changes resulting in 2,500 job losses.
The company will also incur $120-135m in charges linked to the changes, $50-55m of that figure non-cash, with all charges booked in the fourth quarter of fiscal 2013.
“We began five years ago with a set of business strategies that were largely untested by a national retailer of our size and scope,” said Terry Lundgren, Macy’s chairman, president and CEO.
“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.”
The company is persisting with previously announced plans to open a total of eight new Macy’s and Bloomingdale’s stores, it said.
Following the changes, Macy’s will have a portfolio of 844 Macy’s and Bloomingdale’s stores in 45 states, the District of Columbia, Puerto Rico and Guam.
Separately, the department store business hailed a “successful” holiday trading season after reporting comparable store sales up 4.3% during November and December.
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