Macy’s announced Thursday that it is laying off about 3,900 corporate and management employees to reduce costs in response to the economic downturn caused by the coronavirus pandemic.
The department store’s cuts make up 3 percent of its total workforce, excluding seasonal workers, in addition to its reduced staffing across its stores, supply chain and customer support network, according to its press release. The reduced staffing across the board “will adjust as sales recover.”
Overall, the actions are expected to help the company save $365 million for fiscal 2020 and about $630 million annually. These savings will add to the expected $1.5 billion in annual expense savings announced in February.
Macy’s Chairman and CEO Jeff Gennette said in a statement that the pandemic “significantly impacted” the chain’s business.
“While the re-opening of our stores is going well, we do anticipate a gradual recovery of business, and we are taking action to align our cost base with our anticipated lower sales,” Gennette said in a statement. “These were hard decisions as they impact many of our colleagues.”
“We know that we will be a smaller company for the foreseeable future, and our cost base will continue to reflect that moving forward,” he added.
Macy’s expects its restructuring will cost $180 million before taxes — most of which will be counted in the second quarter.
The department store chain shut down its stores on March 18 and began reopening as governments allowed on May 4.
Macy’s is one of many U.S. companies struggling after the pandemic led to economic shutdown — General Electric, Boeing, Uber and Airbnb have announced they will cut thousands of jobs. Department stores have particularly been hard hit, with Neiman Marcus Group, J.C. Penney and Stage Stores filing for bankruptcy.
The preliminary results of Macy’s first quarter reports expect a $905 million to $1.11 billion loss.