Macy's Inc. plans to cut 7,000 jobs, or 4% of its workforce, as it expects sales to remain sluggish through 2009. No store closings were announced. Staff reductions and other moves to restructure the company's operations, including grouping stores by region for merchandising purposes, will help make the Cincinnati-based retailer “more lean and efficient,” Chief Executive Terry J. Lundgren said.
“In the current challenging economy, we must operate in a responsible manner that allows us to maximize the value we offer to our customers and enhance our profitability,” he said. “Reducing our workforce is an unfortunate outcome of the current economic environment, and I am frustrated that so many of our people will be unable to move forward with us.”
Macy's said workers would be cut from the company's stores, corporate offices and other facilities, with an average of five to six positions eliminated per store. The company employs about 180,000 people and also owns Bloomingdale's.
Macy's also slashed its quarterly dividend and announced the widespread rollout of an initiative to localize merchandising to specific stores. Under the plan, Macy's stores nationwide will be grouped into geographic districts that will average 11 stores each. Macy's said the regional groups would help the company focus on local customer needs and preferences in each location.
The company is predicting that sales at stores open at least a year, a key indicator of retail health, will be down between 6% and 8% in 2009.
