US-based department store chain, Macy’s recently said that it will lay off about 3,900 employees in an attempt to save cash due to the weak demand caused by the coronavirus pandemic. The reported job cuts are likely to be from corporate and management positions.
The company currently has a strong workforce of about 123,000 employees. The company said it expects to save about $365mn in 2020 and about $630mn every year as a result of the layoffs.
The company had earlier in May warned of nearly $1bn in operating losses in its first quarter and said it would turn into a “smaller company”.
The job cuts at Macy’s come at a time when the US unemployment figures are constantly rising. Increasing patients of the coronavirus infection in many U.S. states including California, Texas and Florida are likely to hurt employment further as some people stay away from consumer-facing establishments.
“Expect more layoffs akin to Macy’s to be announced in the coming months,” said Matt Fox, founder of Ithaca Wealth Management in New York.
“Retailers that were struggling before the pandemic hit will re-evaluate their operations and cut jobs out of necessity to stay afloat until the economy recovers.”
Macy’s said it has also reduced staffing at its stores, supply chains and customer support network and would adjust their levels as sales recover.
The company, which reopened its flagship Manhattan store on Monday, said it would bring back most of its remaining furloughed employees in the first week of July.
It expects the layoffs to result in pre-tax charges of about $180mn in fiscal 2020.
Earlier in February this year, the iconic American department store chain had announced its plans to shut over 125 stores and cut down over 2000 jobs.
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