Macy’s, Inc. will be furloughing the majority of its employees this week as the coronavirus pandemic continues to take a heavy toll on its operations.
The retailer announced today that it will be “moving to the absolute minimum workforce needed to maintain basic operations.” Most employees will be placed on unpaid leave. Through at least May, furloughed workers will continue to receive health benefits, and the company expects to bring back employees “on a staggered basis as business resumes.”
On March 17, Macy’s announced that it would temporarily shut down all outposts from March 18 through the end of March, including its namesake units as well as stores for Macy’s Backstage, Market by Macy’s, Bloomingdale’s, Bloomingdale’s the Outlet and Bluemercury.
The company’s e-commerce site remains open, but it says it has “lost the majority” of its sales as stores remain shut. Still, Macy’s is implementing fewer furloughs across its digital business, including distribution and call centers, so that it can continue to process online sales.
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To improve its financial flexibility, Macy’s had already suspended its quarterly dividend, deferred capital spend and tapped its $1.5 billion revolving credit facility. The company has withdrawn its sales and earnings outlook for the 2020 fiscal year without putting forth an updated forecast.
In addition to furloughing employees, Macy’s is one of several companies to announce significant reductions in executive pay as a cost-cutting measure during the coronavirus pandemic. In a release last week, the retailer announced that Chairman and CEO Jeff Gennette is forgoing his salary starting April 1. The company also intends to reduce the salaries of its management team members; all employees at the director level and above are expected to take pay reductions that could last “for the duration of the crisis.”
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