In a bid to streamline costs and address slowing sales, venerable department store retailer Macy's, Inc. (NYSE:M) has revealed plans to cut approximately 2,350 jobs and shutter five stores, according to an announcement made on Thursday.
The move is part of the company's ongoing efforts to adapt to the evolving retail landscape and changing consumer behaviors.
A memo obtained by CNBC stated, "As we prepare to deploy a new strategy to meet the needs of an everchanging consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5% to become a more streamlined company." The layoffs will impact staff across various stores and the retailer's corporate office.
This strategic shift comes on the heels of Macy's recent plans to open around 30 smaller stores in strip malls over the next two years. The company aims to connect with suburban shoppers who prefer more convenient local options over traditional large malls.
Tony Spring, currently the head of Macy’s upscale department store Bloomingdale’s, is set to assume the role of CEO in February as part of the company's leadership changes.
The company's decision to downsize follows a series of attempts in recent years to rejuvenate its business, including the introduction of new brands and the establishment of smaller stores. However, these efforts have not diverted its long-term trajectory, and Macy's stock price has declined by 75% from its peak of $73 per share in 2015.
Founded in 1858, Macy's currently operates about 500 Macy's branded stores and 55 Bloomingdale’s locations. Despite its historical significance, the retailer faces intense competition and a shift in consumer preferences away from department stores.
The company has also been approached by a group of investors proposing to take it private, according to reports, though Macy's has remained silent on the matter.
Shares of Macy’s were set to open around 0.4% higher on Friday morning in New York.