Macy’s job cuts are on the way, with 2,500 positions set to be eliminated as part of the company’s reorganization efforts.
The department store chain was just coming off of a strong holiday season when it announced the job cuts. The Macy’s job cuts may not necessarily mean that 2,500 people will be out of work, as the company noted it will reassign or transfer some workers. In the end, its workforce will remain level at 175,000.
The moves are expected to save Macy’s a total of $100 million each year, prompting the company’s stock to rise by 5.5 percent in after-hours trading.
While Macy’s has growth in the forecast, the department store sector has seen difficulties. Its competitor, J.C. Penney, just went through its own restructuring that included major chances to pricing.
J.C. Penney also secured a $1.75 billion loan for Goldman Sachs to boost its inventory and help shore up struggling operations. At the same time, billionaire investor George Soros bought a major share in the company.
The Chief Financial Officer said at the time:
“As we near completion of the home department transformation in over 500 stores, we have been undertaking and will continue to experience a significant inventory build and increase in capital expenditures. The draw under our revolver today provides more than our current funding needs to ensure our continued liquidity. Moreover, we will continue to explore additional capital raising alternatives with the assistance of our financial advisors.”
The Macy’s job cuts were not the only news from the department store chain. Macy’s also plans to close five stores and open eight others, bringing its number of stores nationwide to 844.