Macy's to Cut 100 Management Jobs in Corporate Restructuring
Macy's said Tuesday it will cut about 100 management jobs as looks trim costs and improve profitability amid declining sales. The department store chain was able to top lowered expectations for its fourth quarter, but same-store sales came up short of expectations. Macy's is targeting $100 million in annual cost savings, starting in fiscal 2019, with its new restructuring plan. It said part of this plan consists of reorganizing upper management, cutting 100 vice president level or above roles "to increase the speed of decision making."
Total Retail's Take: Macy's is seeking cost savings as it looks to gain traction with new initiatives that it hopes will increase revenues, and unfortunately job cuts are a prime target for many organizations looking to save money. Specifics on when and in what departments the cuts will take place has yet to be announced, but they appear to be across the organization. The department store chain's fourth-quarter earnings included a disappointing holiday season, which saw same-store sales increase just 1.1 percent year-over-year. Investments in pop-up shops, an increase in the number of Backstage stores (Macy's discount format), and in-store technology (e.g., virtual reality headsets) are being touted as ways that Macy's can turn things around. Analysts remain skeptical, however, pointing to Macy's challenges in generating foot traffic at its stores (many of which are located in malls) as well as fending off increased online competition, particularly from brands that have begun to sell direct to consumer. Job cuts will provide Macy's with initial cost savings, but the key to driving growth will be finding new ways to increase sales and profits.