Macy's 2009 Reorganization Means 7,000 Layoffs
By: Carly Hart Feb 2, 2009
Macy's has announced its 2009 reorganization plan, taking the bull by the horns in this sluggish economy. Macy's new business plan is a bold one, seeking to consolidate operations and dynamically reduceits debt. According to the press release available on the Macys.com site, most of the operational decisions will be made in New York. Divisional offices, including San Francisco, Miami and Atlanta, will suffer deep cuts. 2,850 layoffs, or about 40% of the total net job losses, are expected to occur at these locations under Macy's 2009 reorganization plan. Moreover, Macy's still intends to close 11 under performing stores. The remaining stores can expect 5-6 job losses per store, mainly to keep staffing in line with projected sales figures and customer service needs.
Macy's 2009 reorganization plan: More than just layoffs;
In addition to the 7,000 layoffs, Macy's intends to pro-actively seek to reduce its debt. Employees are also being forced to tighten their corporate belt. Merit raises for 2009 and bonuses for 2008 for executives will not be awarded. Management will also be seeking to reduce executive perks, including clothing discounts, and company cars, as well as financial counseling and life insurance. Additionally, Macy's will be reducing its employer match for employees' 401(k)s. Even stock holders are being asked to tow the line since the retailer plans to slash its quarterly dividend by more than half, down to 5 cents per share. Further aggressively seeking to reduce its potential interest debt, Macy's has also announced it is seeking to buy back $950 Million in notes expected to mature in April and July. One thing is clear: throughout the company, everyone will be impacted by Macy's 2009 reorganization plan in one way or another.
Macy's 2009 reorganization plan: New customer-focused program to drive sales concurrent with Macy's job cuts and aggressive debt reduction and cash conservation practices, the retailer is also launching a new program called "My Macy's" that will focus on customer needs by region. This local marketing program should help reduce costs since customer needs vary by location and the ability to make merchandising decisions based upon varying regional needs should lead to higher customer satisfaction. This new customer-focused approach will help set Macy's apart since customer service will be key in this floundering economy. Rather than wait for disaster in the face of lower sales projections for 2009, the retailer is doing all it can to make sure it doesn't become a casualty of the current economic crisis.