Job Cuts, Reorganization at Macy's
Macy’s is getting leaner and meaner.
In a reorganization plan meant to boost lagging sales, the giant department- store chain is consolidating its regional offices and shedding 2,300 jobs.
Terry Lundquist—the company’s chairman, chief executive and president— said the Cincinnati-based organization is going to act on a more local level to attract core customers. On Jan. 6, Macy’s announced its January same-store sales were down 7.1 percent.
“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,” Lundgren said in a statement.
Store executives have spent the last year developing a program called “My Macy’s.” The program will put more management in the local stores, create new positions in the field to work with buying executives and give local store executives more power.
In addition, three regional offices will be merged with other regional offices by the second quarter of 2008, resulting in thousands of jobs being lost.
The Macy’s North office in Minneapolis will be folded into the Macy’s East office in New York, resulting in 950 positions being lost. The Macy’s Midwest office in St. Louis will be rolled into the Macy’s South office in Atlanta, with 850 jobs eliminated. And the Macy’s Northwest office in Seattle will be consolidated with the Macy’s West office in San Francisco, resulting in 750 jobs disappearing. Some 250 new district and regional positions will be added.
The reorganization is expected to save the company $100 million beginning in 2009. The partial year savings for 2008 should be about $60 million, although a one-time $150-million charge will be taken to cover executive relocation costs and severance pay.
Macy’s needs some kind of shot in the arm after acquiring May Department Stores, its competitor, in 2005 for $11 billion in stock. May Stores had maintained its regional store names, such as Meier & Frank, Robinsons-May, Marshall Field’s and Foley’s, distinguishing the outlets and making them feel more regional. But Macy’s, called Federated Department Stores Inc. until last year, converted 400 May stores to Macy’s nameplates.
This last year has been a challenge for the department-store chain, which has 850 stores and 188,000 employees. The company’s sales for fiscal 2007 were down 2.4 percent to $26.3 billion, compared with $27 billion in fiscal 2006. —Deborah Belgum
