Macy's cuts 950 jobs
Macy's says its move in Minneapolis is part of a national effort that will cut about 2,300 management jobs and combine several regional headquarters across the country. By summer, the Minneapolis-based Macy's North group will be folded into New York-based Macy's East.
The company indicated some executives whose jobs are on the chopping block might land other positions within Macy's. But it looks like most of the affected workers will be looking for jobs with new employers.
Macy's did not return several phone calls asking for details about its actions.
Dan McElroy, Commissioner of the Department of Employment and Economic Development, said Minnesota's dislocated worker programs will provide laid-off workers with retraining and help finding new jobs.
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"Our rapid response team is already in touch with the Macy's leadership," he said. "So we can move to help the employees find new jobs and new opportunities as quickly as possible. But it's certainly never good news when there are major changes like this."
State economist Tom Stinson said the Macy's layoffs will have a noticeable impact on the state's economy.
"Almost all would be considered to be good-paying jobs," Stinson said.. "At a time when the Minnesota economy is weak, to lose a 1,000 good-paying jobs that just makes it more difficult for the Minnesota economy in the short-term."
Macy's sales have been very disappointing for months. Just last month sales at Macy's stores open more than a year fell about seven percent. And December sales were down eight percent.
"Macy's has had a bad year - very poor sales," said retailing consultant Howard Davidowitz. "Obviously the only thing they can do at this point is cut costs, reorganize, get more efficient. You owe that to the shareholders and that's what they're doing."
He doubts Macy's or its retail industry peers can do much to turn themselves around.
"These are dinosaurs. These companies have been losing market share for years. The department store segment has been losing market share for a decade," Davidowitz said.
Traditional department stores now claim only about 4 percent of the nation's overall retail spending.
Shoppers probably won't notice the changes in the corporate suite, but Macy's hopes to translate its savings into change they will notice on the sales floor.
Macy's hopes to revive sales by ratcheting up efforts to customize store merchandise to reflect local tastes and needs. But Macy's and its peers have had a hard time figuring out how they can thrive in today's retail world.
"Traditional department stores are out of sync with consumers in the 21st century," explained University of St. Thomas retailing expert Dave Brennan.
Brennan said old-line department stores haven't learned out how to align themselves with most consumers' wallets, tastes or lifestyles. Brennan noted Macy's has failed to hang on to many former Marashall Field's and Dayton's shoppers. He said many shoppers feel Macy's just isn't as good as the stores it replaced.
"The Macy's name and merchandising have not gained traction. Sales have been below normal," he said.
Macy's has about 860 stores across the country, including 14 in Minnesota. They had sales of $26 billion in 2007. Macy's has indicated all the stores will remain open for now.
