Macy's to slash 3,900 jobs as coronavirus continues to hammer sales

“We know that we will be a smaller company for the foreseeable future, and our cost base will continue to reflect that moving forward,” said Macy's CEO.
Workers prepare for the reopening of the Macy's Herald Square location June 19, 2020, in New York.
Workers prepare for the reopening of the Macy's Herald Square location June 19, 2020, in New York.Frank Franklin II / AP

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/ Source: CNBC.com
By Lauren Thomas, CNBC

Macy's announced Thursday it is laying off 3,900 corporate jobs, or 3 percent of its total workforce, in a move to cut costs as its business has been hurt by the coronavirus pandemic.

The department store chain said it expects to save about $365 million through the layoffs in fiscal 2020. It said it will save roughly $630 million on an annualized basis.

Additionally, Macy’s said it has reduced staffing across its stores, supply chain and customer support network, which it says it will adjust as sales rebound.

“While the reopening of our stores is going well, we do anticipate a gradual recovery of business, and we are taking action to align our cost base with our anticipated lower sales,” CEO Jeff Gennette said in a statement.

“We know that we will be a smaller company for the foreseeable future, and our cost base will continue to reflect that moving forward,” he said.

Macy’s shares were last down about 3 percent in premarket trading on the news.

Macy’s said in fiscal 2020 it plans to spend about $180 million for these restructuring moves, the majority of which will be recorded during the second quarter.

The retailer is set to report first-quarter earnings on July 1, having already released preliminary results. It had said at the end of May that it planned to report a first-quarter operating loss of $905 million to $1.11 billion, compared with net income of $203 million a year ago.

Macy’s shares are down about 60 percent this year.