Another reduction in the retail workforce: this time it is Macy’s announcing a 4% reduction in their workforce, slashing 7,000 jobs. 5,100 of those are at the store level.
“Reducing our workforce is an unfortunate outcome of the current economic environment, and I am frustrated that so many of our people will be unable to move forward with us as we proceed into a very exciting future for Macy’s and Bloomingdale’s,” Macy’s CEO Terry Lundgren said in a statement.
The retailer estimates the restructuring efforts will reduce previously planned expenses by about $400 million a year beginning in 2010.
This is the latest in a line of retail layoffs – last week Home Depot, Starbucks, Williams-Sonoma, and Target all announced layoffs. Best Buy has also announced that they will be cutting workforce in their corporate headquarters later this month.
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Thursday
January 29, 2009
As speculated last week, Starbucks has announced layoffs and another round of store closings. For the quarter ending December 28, the coffee retailer announced a 69% drop in net income and a 10% drop in same store sales.
These store closings are on top of the 600 company-owned stores the chain closed in 2008. 200 of the closings will be in the United States with 100 closing oversees.
CEO Howard Schultz also announced that he is reducing his base pay to $10,000 from $1.2 milllion.
Follow reaction to the announcement in the comments posted over at Starbucks Gossip.
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With the disappointing Holiday season behind us, the layoffs and retail store closings are continuing to mount:
Today, Home Depot has announced that they are closing their line of Expo home design centers and trimming support staff, resulting in 7,000 reduction in staff. With both home sales and the economy down, shoppers aren’t looking for high end home design solutions right now. The retailer is quick to note that the layoffs will not impact any customer service positions at the Home Depot proper chain.
It appears that their Expo stores weren’t performing well during the housing boom, so it’s no surprise that they would be doing even worse during the current economic conditions.
Another victim of the housing slump is Williams-Sonoma. On Friday, the retailer announced an 18% reduction in their workforce. In addition to stores being effected by the layoffs, the retailer will also close a call center in Pennsylvania and a distribution center in Memphis. I think the high end housewares stores have been hurt badly by both the economic downturn and mid-market retailers like JCPenney and Kohl’s.
Starbucks, who closed 600 stores in 2008, is expected to eliminate 1,000 jobs at their corporate headquarters and reducing district managers and field employees. The published report, prepared by investment firm McAdams Wright Ragen, speculates that these layoffs will happen in early February and won’t effect store-level barista positions.
And don’t forget that last week Circuit City announced that they are closing all US operations with job losses effecting up to 35,000 people.
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December wasn’t kind to Macy’s as they saw a 4.0% drop in same store sales and have now announced that they are closing 11 stores. Combining November and December, same store sales dropped 7.5% over last year for the retailer.
Close to 1,000 employees are affected by these store closings – unknown how many fo them will be able to transfer to positions in other stores.
From their press release, the closing stores are:
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Ernst & Young Plaza (Citicorp Plaza), Los Angeles, CA (135,000 square feet; 136 employees; opened in 1986)
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The Citadel, Colorado Springs, CO (195,000 square feet; 105 employees; opened in 1984)
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Westminster Mall, Westminster, CO (156,000 square feet; 110 employees; opened in 1986)
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Palm Beach Mall, West Palm Beach, FL (190,000 square feet; 71 employees; opened in 1979)
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Mauna Lani Bay Hotel, Island of Hawaii, HI (3,000 square feet; 3 employees; opened in 1983)
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Lafayette Square, Indianapolis, IN (160,000 square feet; 84 employees; opened in 1974)
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Brookdale Center, Brooklyn Center, MN (195,000 square feet; 72 employees; opened in 1966)
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Crestwood Mall, St. Louis, MO (166,000 square feet; 176 employees; opened in 1969)
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Natrona Heights Plaza, Natrona Heights, PA (73,000 square feet; 124 employees; opened in 1956)
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Century III Furniture and Clearance, West Mifflin, PA (83,000 square feet; 3 employees; opened in 2000)
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Bellevue Center, Nashville, TN (211,000 square feet; 76 employees; opened in 1990).
These store closings represent a troubling sign of things to come for the retail industry. I believe Macy’s is just the first in a line of retailers to announce downsizing over the next few weeks. Who’s next?
More coverage from the Consumerist, Reuters and BloggingStocks.
Photo above from Flickr user pkeleher. Use under Creative Commons License.
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