With no clear timeline for when stores will reopen, Macy’s Inc. is furloughing most of its employees as the COVID-19 outbreak continues to take a heavy toll on its business.
The department store giant, which has about 130,000 employees, said that, starting this week, it will be moving to the “absolute minimum workforce” needed to maintain basic operations across its brands. With its online operations still open for business, there will be fewer furloughs in the retailer’s digital business, supporting distribution centers and call centers as it continues to serve customers online.
In a statement, Macy’s noted it has lost the majority of its sales due to the store closures. It detailed the measures it has already taken to maintain financial flexibility, including suspending its dividend, drawing down its line of credit, freezing hiring and spending, stopping capital spend, reducing receipts, canceling some orders and extending payment terms. The retailer, which said the actions it has taken have helped, “but not enough,” is evaluating all other financing options.
At least through May, Macy’s furloughed employees who are enrolled in health benefits will continue to receive coverage with the company covering 100% of the premium. The company expects to bring back its employees on a staggered basis as business resumes.
Last week, Macy’s said that CEO Jeff Gennette will not receive compensation from April 1 until the end of the crisis. It said it would also reduce pay for the period for all executives at management director level and above.