Macy's to cut more jobs in restructuring
Jun 26, 2020, 4:11pm EDT
Macy’s Inc. will cut its corporate and management headcount by 3,900 and reduce staffing in its stores, supply chain and customer support network while it struggles to recover from the impact of the Covid-19 pandemic.
“Covid-19 has significantly impacted our business. 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, chairman and chief executive officer of Macy’s, Inc., in a statement.
The company expects the staff reductions will reduce expenses by approximately $365 million in fiscal 2020 and approximately $630 million on an annualized basis. The savings will be in addition to an anticipated $1.5 billion in annual expense savings announced in February.
The company expects FY2020 pre-tax costs of approximately $180 million in cash for the restructuring activities, the majority of which will be recorded in the second quarter and all of which will be in cash.
“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,” Gennette said.
In preliminary sales and operating results released last month, Macy’s said it experienced a 45% loss of sales in Q1 and expects to post a nearly $1 billion operating loss when it reports its financial results July 1.
New York-based Macy’s Inc. (NYSE: M) includes retail brands, Macy’s, Bloomingdale’s and Bluemercury.
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