Macy's announced numerous store closures, as well as mass layoffs, which would affect thousands of employees. The American department store chain said that it had to do these in order to embrace the changes in the retail industry.
This was confirmed by Macy's in a memo sent to employees on Thursday, Jan. 18. For those who are affected by the mass layoffs, the announcement is certainly heartbreaking since it's just the start of 2024 and they will already face terminations.
However, Macy's spokesperson explained that these layoffs and store closures are needed so that the company can keep up with the intensifying competition in the retail sector.
Macy's Announces Store Closures, Mass Layoff
The Macy's company signage is seen at the Herald Square store on March 02, 2023 in New York City. Macy's Inc. stock jumped 14.8% in premarket trade on Thursday, after the department store chain exceeded forecasted estimates for the fourth quarter.
Macy's confirmed that 2,350 employees will be terminated. Layoffs already began on Jan. 18 and will continue until Jan. 26. According to Fox Business' latest report, affected workers are 3.5% of Macy's overall workforce.
When it comes to its branches, Macy's said that it would close five stores, as well as sell two furniture locations since it is planning to relocate them.
Here are the exact locations of the affected Macy's stores:
- Governor's Square, Tallahassee (Florida)
- Ballston Quarter, Arlington (Virginia)
- Simi Valley Town Center, Simi Valley (California)
- Bayfair Center, San Leandro (California)
- Kukui Grove Center, Lihue (Hawaii)
"As we prepare to deploy a new strategy to meet the needs of an ever-changing consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5% to become a more streamlined company," said Macy's spokesperson via CNN Business.
The layoffs and store closures are being conducted by Macy's as it tries to make a transition to attract a younger generation of shoppers.
The American retailer expects these adjustments to help to adapt to the small-format store trends in the retail industry; Kohl's, Nordstrom, Target, and other companies are already relying on this business format.
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Macy's Transitions To Small-Format Store Trend
A post-Christmas shopper holds Macy's bags as other shoppers cross Seventh Avenue December 27, 2006 in New York City. Retailers are hoping that after-Christmas shoppers will help them regroup after a somewhat disappointing holiday shopping season thus far.
In October 2023, Macy's announced that it is transitioning to the small-format store trend. To accelerate this effort, the retailer said that it will open 30 smaller stores across the U.S.
Numerous business experts said that moving to small-format stores could greatly help many retailers and other consumer companies. To give you an idea, small-format stores don't require a lot of space.
Unlike, traditional big-box or department store formats, these small-format stores have smaller footprints. This means that staff and managers in small-format stores can provide better customer service since they can easily get near shoppers.
Aside from a more targeted and personalized shopping experience, small-format stores can also improve the flexibility and adaptability of businesses.
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