US department store chain Macy’s has decided to reduce corporate and management headcount by around 3900, citing the impact the coronavirus pandemic had on its business.
The move is part of the company’s restructuring strategy, which is in line with its cost base to accelerate recoveries from the pandemic.
Earlier last month, the retailer announced plans to reopen 68 stores in the US after closing from 18 March due to the coronavirus pandemic.
As part of the restructuring, Macy’s also reduced staffing across its stores’ portfolio, supply chain and customer support network, adjusting as sales recover.
Meanwhile, remaining furloughed employees will resume work starting 5 July.
Macy’s chairman and CEO Jeff Gennette said: “Covid-19 has significantly impacted our business. While the re-opening of our stores is going well, we do anticipate a gradual recovery of the business, and we are taking action to align our cost base with our anticipated lower sales.
“These were hard decisions as they impact many of our colleagues. I want to thank all of our colleagues – those who have been active and those on furlough – for helping us get through this difficult time, and I want to express my deep gratitude to the colleagues who are departing for their service and contributions. We look forward to welcoming back many of our furloughed colleagues in the first week of July.”
With the latest announcement, Macy’s expects to generate expense savings of approximately $365m in 2020 fiscal and approximately $630m annually.
Earlier this month, the retailer strengthened its liquidity with the closing of two financings including $1.3bn of 8.375% senior secured notes and a $3.15bn asset-based credit agreement.