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Macy's to cut 7,000 jobs


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POSTED: Tuesday, February 03, 2009

NEW YORK >> Macy's Inc. announced yesterday that it will eliminate 7,000 jobs, almost 4 percent of its work force, and cut capital spending, reduce its contributions to its employees' retirement funds and slash its dividend to preserve cash amid a severe pullback in consumer spending.

 

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The Cincinnati-based department store chain also announced the national rollout of a plan to localize merchandising to specific markets, which it began in some regions last year.

The company, which also delivered yesterday downbeat earnings and sales forecasts for the year, said it plans to integrate all its geographic divisions into a single unit.

All inquiries regarding the possible effect on Hawaii were referred by local and San Francisco representatives to the company's New York headquarters. Phone messages that were left were not returned.

Macy's said the job cuts, which include some unfilled positions and 1,900 being eliminated in the restructuring, will come at corporate offices, stores and other locations. The company employs about 180,000 people.

Macy's announced last month - on the heels of the worst holiday shopping season in decades - that it would close 11 stores, affecting 960 employees. A 3,000-square-foot store located at the Mauna Lani Bay Hotel on the Big Island was listed among the closures. The company expects the additional actions announced yesterday to lower its annual selling, general and administrative expenses about $400 million per year starting in 2010.

The company also slashed its quarterly dividend to 5 cents from 13.25 cents. The dividend will be paid on April 1 to shareholders of record March 13.

“;We just believe that this is a time when nothing should be considered a sacred cow,”; Macy's Chief Executive Terry J. Lundgren said in a conference call with analysts yesterday after the announcement.

Macy's began testing the localization strategy in 20 regional markets last spring and expects the reorganization to be complete beginning in the second quarter this year.

Lundgren said the strategy has worked well so far, pointing to the fact that 13 of Macy's 15 top-performing geographic markets in December were part of the pilot program.