Macy’s, a US-based chain of department stores, has outlined a series of cost cutting initiatives, which will allow it to generate savings of approximately $100m per year beginning in 2014.
The cost cutting programme will initiate by laying off around 2,500 jobs at its stores across the nation.
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The affected employees will be eligible for severance while other associates will be reassigned with new duties or transferred, claims the company.
Meanwhile, the company will continue to add new positions in other divisions such as online operations, direct-to-consumer fulfilment and new stores.
In all, the department store chain plans to have a workforce of approximately 175,000 associates.
As part of its organisational structure, Macy’s will combine the Midwest Region with the North Region and create a new North Central Region and reduce the number of regions from current eight to seven.
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By GlobalDataThe company also plans to close five of its stores by early spring 2014, and add eight new and replacement Macy’s and Bloomingdale’s stores to the portfolio.
Macy’s chairman, president and CEO Terry J. Lundgren said the stores remain a very important component of their omnichannel strategy for both the Macy’s and Bloomingdale’s brands.
"We continue to maintain a very strong nationwide network of stores through an ongoing process of selectively adding new locations while also trimming those that no longer meet our performance requirements or where our leases were not renewed," Lundgren added.
Following the implementation of cost cutting programme, the company expects to record charges of $120-135m in the fourth quarter of 2014.
Lundgren said the strategy reinforce their focus on continuous improvement in their MOM strategies (My Macy’s localization, Omnichannel integration and Magic Selling customer engagement) and will help them to maximise the impact of the exceptional talent they enjoy at every level of their organisation.
Image: Macy’s Department Store in New York City. Photo courtesy of Mike Strand.
