Macy’s to lay off 2,500 employees amid cost-cutting
In the same breath as it announced a “successful” holiday season, Macy’s Inc. said it would lay off some 2,500 employees as it attempts to achieve $100 million in savings a year.
In addition to the workers losing their jobs, some associates will be reassigned or transferred, the retailer said. Not all open positions will be filled.
Among the positions targeted: district merchandise planners for Macy’s soft home categories, whose responsibilities will be handed off to regional and national organizers.
Macy’s said it plans to trim central office, administration and back-of-house expenses. The retailer also intends to combine its Midwestern and Northern regions to create a North Central area, leaving it with seven zones instead of eight.
The changes will leave Macy’s with roughly 17,500 workers, though the company said it will keep hiring employees in its online operations, direct-to-consumer fulfillment outfit and new stores.
Five Macy’s stores in Arizona, Kansas, Missouri, New York and Utah will close in the spring. But eight new and replacement Macy’s and Bloomingdale’s stores are in the works.
When the dust settles, Macy’s – which has corporate offices in New York and Cincinnati – will have 844 stores in its system.
The retailer’s chief executive, Terry J. Lundgren, said Wednesday that consumers gave it a “vote of confidence” during the holiday season, “even in a questionable macroeconomic environment with challenging weather in multiple states.”
In November and December, so-called same-store sales, those at stores open more than a year, ticked up 3.6%, or 4.3% when departments licensed to third parties were included.
The company said it is reaffirming its full-year 2013 projection for earnings of $3.80 to $3.90 a share. But it adjusted its predictions for the second half of last year, saying that same-store sales would rise 2.8% or 2.9% instead of 2.5% to 4%.
In the fourth quarter, that means a 2.3% to 2.5% upswing is likely, the company said.
For this year, Macy’s said it expects same-store sales to rise 2.5% to 3%, with earnings of $4.40 to $4.50 a share.
On Wednesday, Macy’s shares slipped 34 cents, or 0.7%, to $51.84. But in after-hours trading, they were up $2.66, or 5.1%, to $54.50.
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