Macy’s job cuts impact DCs
Workforce reductions announced by Macy’s Inc. on Monday will cover distribution centers as well as stores and other parts of the company.
The prominent retailer said it plans save $250 million this year and $400 million per year thereafter by laying off 7,000 employees, or about 4 percent of its labor pool.
The move is an attempt to stabilize profits and cash flow in the face of lower sales projections in 2009.
About five to six jobs on average will be eliminated at most store locations and spokesman Jim Sluzewski said similar reductions will take place at distribution centers.
Macy’s said it is also ending its division structure and centralizing functions such as planning, buying, marketing and store supervision. Sluzewski said those areas will now be in line with the logistics, information technology and credit departments, which were centralized many years ago.
The company said it is also reducing its quarterly dividend and discretionary spending, eliminating merit salary increases for executives, reducing the level of its 401K match and paying off debt that is maturing in 2009. Ending executive perks such as company cars is also on the table for review.
Macy’s also announced several executive changes as part of its reorganization. Thomas L. Cole, vice president of Macy’s Inc., was named chief administrative officer. Among his areas of responsibility is logistics.
Same store sales are expected to tumble 6 percent to 8 percent in 2009, the company said. ' Eric Kulisch