Cincinnati Macy's Inc. said Wednesday it will cut about 2,300 management jobs as the department store operator consolidates three regional divisions and decentralizes buying in a bid to reduce costs and boost sales.
The announcement came as Macy's announced that it had a steeper-than-expected drop in sales in January at established stores.
The retailer said it will immediately begin consolidating its Minneapolis-based Macy's North headquarters into its New York City-based Macy's East, its St. Louis-based Macy's Midwest organization into its Atlanta-based Macy's South and its Seattle-based Macy's Northwest headquarters into its San Francisco-based Macy's West.
The consolidation of the office organizations are expected to be completed in the second quarter of 2008 will affect 950 positions at Macy's North, 850 positions at Macy's Midwest and 750 positions at Macy's Northwest in Seattle.
The company said executives currently in those offices will be considered for positions in the new local market organization or for open positions elsewhere, Macy's said. Laid-off employees will receive severance benefits and outplacement assistance, Macy's said.
At the same time, it said it will add 250 new management positions at its stores to better tailor its product offerings to specific regions. The net effect would be a reduction of 2,300 jobs in Macy's current work force of about 188,000.
Macy's Inc. also reported that same-store sales fell 7.1% in January. The drop was mainly due to one less week in the fiscal January 2008 calendar compared with the same period a year ago, the company said. Total sales in January fell 29% to $1.28 billion, from $1.78 billion last year.
For the fourth quarter, same-store sales fell 2%, while total sales fell 6.1% to $8.6 billion, from $9.16 billion last year.
For the fiscal year, same-store sales fell 1.3% while total sales fell 2.4% to $26.32 billion, from $26.97 billion last year.