Macy's is slashing jobs, a harbinger of hard times for retailers after a holiday season that saw a noticeable shift to online shopping and away from physical stores. The nation's largest department-store chain, which also operates Bloomingdale's, said late Wednesday it's cutting up to 4,800 jobs from a staff of about 163,000 workers and trimming its profit outlook after a miserable holiday season. "I think Macy's is likely to be a canary in a coal mine," says the president of Retail Metrics, a retail research firm. About 2,110 of the job cuts will come from reducing staffing at stores, eliminating duplications in back-office operations, and consolidating regional store groups. The remaining 2,710 job cuts will come from the store closings that Macy's announced last fall, a spokesman notes.
The moves are part of Macy's campaign to position itself to compete in a retail world where increasingly demanding shoppers are going back and forth between stores and their mobile devices. Macy's says sales at existing stores (excluding licensed departments) fell 5.2% in November and December, claiming warm weather as the biggest culprit; business was also hurt by less spending by international tourists. But Macy's is also contending with broader changes in spending habits: Increasingly, Amazon and other online rivals are becoming a threat. Macy's also has acknowledged customers are spending more on experiences like eating out, not on clothing—and when they do buy clothes, they're more likely to buy discounted name brands at stores like TJ Maxx. "There will be short-term pain as we tighten our belt and realign our resources," its CEO said in a statement. "But our eye is on a long-term vision of Macy's Inc. as a dynamic retailer that serves existing customers and acquires new ones through innovative approaches." (Macy's is catching up online.)