Retail giant, Macy's, plans to reduce its workforce by 3.5% and shutter five of its mall anchor stores.
Macy's is slicing its workforce by 3.5% as confirmed by a company email on Thursday. The company is also shuttering five Macy's full-line stores.
In an informal message, a spokesperson stated, "As we ready a new approach to cater to the fluctuating consumer and marketplace, we made the tough choice to reduce our workforce by 3.5% to transform into a leaner corporation."
Last month, Macy's was allegedly considering an offer from activist investors keen on utilizing its property. Tony Spring, the incoming CEO, is set to join in the early months of 2026.
Neil Saunders, GlobalData Managing Director, opines that while workforce reduction and store closures are commonplace in retail, there's a time limit on this strategy. "Retailers can't shrink to achieve success," Saunders commented.
Outgoing CEO Jeff Gennette had previously declared that a series of closures in 2023 indicated "the last leg" of a fleet reduction that began in 2016, encompassing the shuttering of around 170 locations. However, some analysts have speculated an influx of more closures.
Macy's is stepping up plans to introduce smaller format stores outside the mall, and executives have mentioned that this could mean the end for more full-line stores. The decision to close five full-line stores this year is related to the project of figuring out the perfect blend of on- and off-mall stores, the company stated on Thursday.
Saunders suggested that these moves represent "a one-off course correction" rather than a 2025 pattern.
"Under the upcoming guidance of Tony Spring, Macy's urgently needs to concentrate on boosting the shopping experience and reinforcing trade," Saunders said. "This path may be daunting, but in the long run, it's much more durable than constant cost-cutting."
The Wall Street Journal first disclosed the news, citing an employee memo indicating that approximately 2,350 corporate positions would be eliminated later this month. Automation in supply chain, some outsourcing, and quicker decision-making were reportedly reasons for the cuts.
Apart from the closures of mall anchors in California, Florida, Hawaii, and Virginia, Macy's will sell and relocate two furniture stores, as per the Journal's report.
Additional Insights: The recent restructuring efforts by Macy's reflect broader challenges in the retail sector, being pushed by evolving consumer preferences toward e-commerce and underachieving physical locations[1][4].
Key elements behind the reductions include e-commerce's dominance, operational efficiency, and cost pressures[1][3]. Future plans under Tony Spring involve strategic reinvestment, innovative formats, and focusing on agility to align with evolving consumer expectations[1][5]. The strategy aims to solidify Macy's presence in a market progressively dominated by digital-first competitors[1][4].
- Macy's is restructuring, reducing its workforce by 3.5% to transform into a leaner corporation as they prepare for a new approach in catering to the changing consumer and marketplace.
- The company hopes to boost their shopping experience and strengthen their trade, focusing on strategic reinvestment, innovative formats, and agility to align with evolving consumer expectations under the upcoming leadership of Tony Spring.
- Macy's is shuttering five Macy's full-line stores and stepping up plans to introduce smaller format stores outside the mall, marking the end for more full-line stores according to executives.
- Neil Saunders, GlobalData Managing Director, comments that while workforce reduction and store closures are commonplace in retail, retailers can't continue to shrink to achieve success.
- Saunders suggests that Macy's moves, such as rebalancing their store portfolio and focusing on automation in supply chain, represent a one-off course correction rather than a 2025 pattern.
- The restructuring efforts of Macy's reflect broader challenges in the retail industry, being pushed by evolving consumer preferences towards e-commerce and underachieving physical locations.
- The company's recent efforts are also focused on improving operational efficiency and managing cost pressures in an industry dominated by digital-first competitors.
