Macy's, one of the largest department stores in the U.S., announced Wednesday it had a successful holiday season but is still planning to cut more than 1 out of every 100 employees to reduce costs.
Macy's plans to lay off 2,500 employees and close five Macy's stores in Arizona, Kansas, Missouri, New York and Utah by early Spring as a part of its cost-cutting and restructuring effort. (Via CNN)
The company said in an announcement its layoffs of 1.4 percent of its workforce, along with store closings, will save Macy's $100 million annually.
CEO Terry Lundgren said in a press release the company identified areas where Macy's could improve efficiency to better serve customers, but added, "Cutting back is also a recognition that technology has worked satisfactorily at Macy’s and that a lot of their new business comes from the Internet." (Via The Wall Street Journal, Businessweek)
The announcement comes with good news in terms of the retails store's holiday performance. The Los Angeles Times reports, "In November and December, so-called same-store sales, those at stores open more than a year, ticked up 3.6%, or 4.3% when departments licensed to third parties were included."
But at least one Bloomberg analyst questioned the move, essentially saying the company is shafting employees to increase its bottom line.
"That is exactly what you don't want to hear — cutting jobs and saving money in the process. That's main street versus Wall Street; we're going to cut jobs and improve the earnings picture. So, that's ugly."
Macy's stock rose more than 5 percent Wednesday following the announcement. Businessweek reports the savings will take effect in the next fiscal year.