A person looks into a closed Macy’s Inc. department store near Union Square in San Francisco, California, U.S., on Thursday, June 18, 2020.
Michael Short | Bloomberg | Getty Images
The department store chain said it expects to save about $365 million through the layoffs in fiscal 2020. It said it will save roughly $630 million on an annualized basis.
Macy’s said it has reduced staffing across its stores, supply chain and customer support network, which it will adjust as sales rebound.
“While the re-opening 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,” Chief Executive Jeff Gennette said in a statement.
“We know that we will be a smaller company for the foreseeable future, and our cost base will continue to reflect that moving forward.”
Macy’s shares were last down about 3% in premarket trading on the news.
Macy’s stores closed its stores on March 18, and some began reopening on May 4, as local restrictions aimed at preventing the spread of coronavirus were removed. Its flagship Herald Square store in New York was able to reopen this week.
The retailer is one of many that have struggled through the Covid-19 crisis. Department store operators Neiman Marcus, J.C. Penney and Stage Stores each have filed for bankruptcy during the pandemic. The health chain GNC Holdings filed for bankruptcy protection earlier this week, planning to permanently shut hundreds of stores.
Earlier this month, Macy’s announced that it has raised $4.5 billion in new financing to help it weather the crisis.
Macy’s said it plans to spend about $180 million in fiscal 2020 for the fresh restructuring moves, most of which will be recorded during the second quarter.
The retailer, which is set to report first-quarter earnings on Wednesday, already released preliminary results. It said at the end of May that it planned to report a first-quarter operating loss of $905 million to $1.11 billion, compared with net income of $203 million a year earlier.
Macy’s shares are down about 60% this year.
Originally published on CNBC