Macy’s, the veteran department-store chain, is set to lay off approximately 3.5% of its workforce, equivalent to roughly 2,350 employees, and close five stores as part of its ongoing efforts to adapt to the changing retail landscape and bolster its online presence. The decision is linked to Macy’s strategic shift to better meet the evolving needs of consumers and the retail market. The company spokesperson explained that the layoffs are aimed at streamlining operations and creating a more efficient organization.
This move comes after the holiday season, during which retailers typically reassess their performance and make adjustments. Despite a generally brisk December in terms of consumer spending, Macy’s is looking to position itself for sustained success amid increased competition and changing shopping habits. The company, founded in 1858, currently operates about 500 Macy’s branded stores and 55 Bloomingdale’s stores.
Macy’s has faced challenges in recent years as department stores grapple with shifting consumer preferences and the rise of e-commerce. The company has experimented with various strategies, including introducing new brands and smaller-format stores, but has struggled to reverse its long-term decline. The stock price of Macy’s has experienced a significant drop, falling 75% from its peak of $73 per share in 2015.
In December, a group of investors reportedly proposed taking Macy’s private, adding further complexity to the company’s situation. Macy’s has not officially commented on this activist attempt. Over the years, the company has closed nearly 300 stores, accounting for almost one-third of its total stores, and currently operates around 700 stores across its various brands. Macy’s iconic status, marked by events like the Thanksgiving Day Parade and its role in the film “Miracle on 34th Street,” underscores the challenges faced by even longstanding retail institutions in today’s competitive and dynamic market.