Macy's Inc. is reducing its huge workforce by about 3% in a restructuring move to cut costs as its business looks to recover from the impact of the COVID-19 pandemic.
The department store giant will reduce its corporate and management headcount by approximately 3,900. Additionally, Macy’s said it has reduced staffing across its store portfolio, supply chain and customer support network, which it will adjust as sales recover. (Most of the remaining furloughed staff will return to work the first week of July.)
Macy's expects the moves to save $365 million in fiscal 2020, and about $630 million on an annualized basis. The savings are in addition to the anticipated $1.5 billion in annual expense savings Macy’s announced in February, which it expects to fully realize by year-end 2022.
"While the re-opening 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," said Jeff Gennette, CEO of Macy's. “We know that we will be a smaller company for the foreseeable future, and our cost base will continue to reflect that moving forward. Our lower cost base combined with the approximately $4.5 billion in new financing will also make us a more stable, flexible company.”
Earlier this month, Macy’s said its reopened stores were performing better than expected. The company will announce first-quarter results on July 1.