Retailer Macy’s has announced that it plans to cut as many as 7,000 jobs in response to the slowdown in retail:
CHICAGO (MarketWatch) — Joining the parade of companies laying off thousands, department-store chain Macy’s Inc. said Monday it would make deep cuts in its workforce and slash its dividend by more than half.
Shares of New York-based Macy’s fell as much as 16% but lately recovered to $8.43, down 6% on the session. A year ago, the shares had a value of more than $28 before they scraped all the way down to the $5 range last November.
Macy’s said about 7,000 jobs — about 4% of its total employee base — would be eliminated as part of an effort to save $250 million this year and $400 million annually starting in 2010.
The Macy’s board also approved a 62% reduction in its quarterly dividend, down to 5 cents a share from the current payout of 13.25 cents, while the company commenced a tender offer to redeem $950 million in debt set to mature later this year.
While the loss of the jobs will unquestionably be a bitter blow to those who’ll lose their jobs, I think that Macy’s is behaving with better corporate citizenship than many companies these days. At least its employees won’t be the only ones to feel the pain.
I wonder how much of these cuts are motivated by the decline in retail sales and how much by Macy’s problems in securing re-financing for its debt.
