Macy's to cut 2,300 jobs
CINCINNATI (AP) - February 6, 2008 The announcement came as Macy's announced separately that it had
a steeper-than-expected drop in sales in January at established
stores. Shares fell almost 5 percent on the news.
The Cincinnati-based retailer said it will immediately begin
consolidating its Minneapolis-based Macy's North headquarters into
its New York-based Macy's East, its St. Louis-based Macy's Midwest
organization into its Atlanta-based Macy's South and its
Seattle-based Macy's Northwest headquarters into its San
Francisco-based Macy's West.
The consolidation of the office organizations expected to be
completed in the second quarter of 2008 will affect 950 positions
at Macy's North, 850 positions at Macy's Midwest and 750 positions
at Macy's Northwest in Seattle.
The company said executives currently in the those offices will
be considered for positions in the new local market organization or
for open positions elsewhere, Macy's said. Laid-off employees will
receive severance benefits and outplacement assistance, Macy's
said.
At the same time, it said it will add 250 new management
positions at its stores to better tailor its product offerings to
specific regions.
The net effect would be a reduction of 2,300 jobs in Macy's
current work force of about 188,000.
Macy's also says it expects to reduce expenses by about $60
million this year and by about $100 million a year starting in
2009.
The company plans to take a one-time charge of $150 million
dollars this year for expenses related to the consolidation.
"Improving sales and earnings performance requires innovation
in engaging our customer more effectively in every store, as well
as reducing total costs," said Terry Lundgren, Macy's chairman,
president and chief executive officer. "We believe the right
answer is to reallocate our resources to place more emphasis and
talent at the local market level to differentiate Macy's stores,
serve customers and drive business."
Macy's said that same-store sales, which are sales at stores
open at least a year and are a key barometer of a retailer's
health, fell 7.1 percent. Analysts surveyed by Thomson Financial
had expected a 5.9 percent drop.
Shares of Macy's fell $1.19, or 4.7 percent, to $23.91 in late
afternoon trading.
