Macy’s Layoffs 2020: Why 3,900 Corporate Employees Will Lose Their Job

Macy’s (M) announced that it will be laying off 3,900 workers from its corporate offices, including a series of management positions.

The retailer will also reduce its workforce throughout its stores, supply chain, and customer support network because of a dip in sales because of the coronavirus pandemic.

Macy’s closed all of its stores temporarily on March 18 because of the COVID-19 crisis and began reopening locations on May 4. The company has undergone a phased reopening as local and state guidelines allow.

The department store chain said the job cuts will allow it to align its costs as it recovers from the impact of the pandemic. The company plans to bring back many of its furloughed employees in the first week of July.

Macy’s said it expects the layoffs to provide about $365 million in cost-savings in fiscal 2020, about $630 million on an annualized basis. The company previously announced cost-cutting measures that were designed to save an estimated $1.5 billion by the end of 2022.

“COVID-19 has significantly impacted our business. While the reopening 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,” Chairman and CEO Jeff Gennette said in a statement. “These were hard decisions as they impact many of our colleagues.”

Gennette continued, “We know that we will be a smaller company for the foreseeable future, and our cost base will continue to reflect that moving forward. Our lower cost base combined with the approximately $4.5 billion in new financing will also make us a more stable, flexible company.”

Macy's stock was trading at $6.44 per share at 11:39 a.m. EDT, down $0.34 from 4.94%.