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American department store Macy’s is eliminating 10,100 jobs as it plans to close 68 stores. The job cuts are part of a series of actions to “streamline its store portfolio, intensify cost efficiency efforts and execute its real estate strategy”, the company said earlier this week.
The closure of 68 stores is part of the 100 closings the company announced in August 2016, and three of the 68 were already closed in mid-2016. A further 63 stores will shut their doors by early spring 2017 and two will be closed in mid-2017. Additionally, three other locations were sold, or are to be sold, and are being leased back.
Over the next few years, 30 more stores are expected to close their doors as leases expire and sale transactions are completed.
In addition to the store closures, the company announced a restructuring of its central organisation with a focus on eliminating layers of management to reduce costs.
In a press release, the company estimates 3,900 employees will be displaced by the store closures, while another 6,200 staff members will be made redundant as a result of the restructuring. Employees displaced by store closings may be offered positions in nearby stores, and eligible full-time and part-time staff affected by the store closings will be offered severance benefits.
Commenting on the expected job losses in a press release, Terry J. Lundgren, chairman and chief executive officer of Macy’s, said: “These are never easy decisions, and we are committed to treating associates affected by these closings with respect and transparency.”
The announced actions come after the company released disappointing sales results for the November and December 2016. Compared to the same period last year, sales during the two months fell 2.1%. They are estimated to generate annual expense savings of approximately US$550 million, beginning in 2017.
One of the areas in which the company intends to invest the savings in its business in China, where it has been selling online since November 2015 and plans to launch a Chinese e-retail site in 2017.
Photo / Macy’s