The iconic department store Macy’s announced plans Wednesday to lay off about 4,350 employees and close more than 40 stores nationwide, including two in California.
Macy’s said about 3,000 sales associates will be impacted, or about three to four per Macy’s and Bloomingdale’s location. The company expects that about half of the affected store associates will be “placed in other positions.”
Another 1,350 employees in back office and service center positions will be impacted by the cost-cutting moves. Some of those workers too are expected to be reassigned to other jobs, Macy’s said.
Upper management is also being impacted, with Macy’s implementing a “voluntary separation opportunity” for about 165 senior executives.
The retailer also announced plans to close more than 40 stores including two locations in California: the Macy’s at the Irvine Spectrum, which opened in 2002; and a store at the Country Club Plaza in Sacramento, which opened in 1961, according to a news release from the company.
All told, Macy’s hopes to save about $400 million to help offset its “disappointing” 2015 results.
It was fresh evidence of the struggles at Macy’s. The company said sales in the critical November and December period slumped by a worse-than-expected 5%. Profits are also expected to miss the company’s own targets.
Like other retailers, Macy’s blamed the “historically warm weather” in northern climates. Macy’s said about 80% of its sales declines can be attributed to shortfalls in cold-weather goods like coats, sweaters, hats, gloves and scarves.
Macy’s also pointed to the impact of the strong U.S. dollar, which has caused international tourists to spend less.
Macy’s expects the cost-cutting moves to hurt fourth-quarter profits by $200 million.
Still, Wall Street cheered the belt tightening, bidding Macy’s shares up nearly 6% in after-hours trading on Wednesday. The stock lost nearly half its value in 2015, making it one of the worst performers in the S&P 500.