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The company, which has about 130,000 employees, earlier this month shut its more than 800 stores, suspended quarterly dividend and withdrew its 2020 forecasts. It has also drawn down all its available credit and frozen hiring and spending to offset the impact of the pandemic on sales.
Retailers such as Nordstrom (N:JWN) and Gap Inc (N:GPS) have also moved to cut costs in an attempt to cope with the financial strain and uncertainty caused by the outbreak.
“We’ve already taken measures to maintain financial flexibility … While these actions have helped, it is not enough,” Macy’s said in a statement https://www.macysinc.com/news-media/press-releases/detail/1618/macys-inc-provides-business-update-in-response-to.
Widespread lockdowns to arrest the spread of the outbreak have hammered sales for the retailer as most of its physical stores remain closed, despite the online business staying up and running.
The fast-spreading virus, which has killed about 34,000 people across the globe, has only compounded sales pressure for retailers that were already struggling with stiff competition and a shift to online shopping.
Further underscoring the pandemic’s devastating blow to the U.S. economy, the number of Americans filing claims for unemployment benefits surged to a record of more than 3 million in the week before last.
The economic hit has also prompted the Federal Reserve to take the extraordinary measure of a $2 trillion stimulus package.
Macy’s said on Monday it would maintain the “absolute minimum” workforce needed to maintain basic operations across its Macy’s, Bloomingdales and Bluemercury brands.
At least through May, furloughed employees enrolled in health benefits will continue to receive coverage, with the company covering the premium amount. Employees at a director-level who are not furloughed will receive a pay cut.
The retailer added there would be fewer furloughs in its digital business, which is still operational, supporting distribution centers and call centers.
Macy’s said it planned to keep its stores shut and bring back employees on a staggered basis only once business resumes.
