Macy's to Cut 7,000 Jobs Amid Reorganization
Macy's announced yesterday that it will eliminate 7,000 jobs by May 1 as it undertakes a massive reorganization in the face of slumping sales and depressed consumer spending.</br></br>The cuts represent about 4 percent of the company's 180,000-person workforce. Stores will lose an average of five to six employees, while about 40 percent of management positions will be cut, Macy's said. The Washington region, however, is expected to get a boost of 70 jobs under the restructuring.</br></br>In addition, Macy's said it will begin repurchasing about $950 million in debt that will mature later this year, which should help reduce interest expense. It also said that it was lowering the quarterly dividend to 5 cents per share from 13.25 cents.</br></br>The company estimated that its cost-cutting will save $250 million this year and $400 million annually in the future. It is also slashing capital expenditures to $450 million from an original estimate of $1 billion, lowering contributions to employees' 401(k) plans and eliminating merit raises for executives this spring.</br></br>"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. "[We] challenged ourselves to come up with an expense plan that we thought we could live with."