Macy's plans to eliminate 7,000 jobs
WASHINGTON - Macy's Inc., the second-largest US department-store company, is eliminating 7,000 jobs, slashing its quarterly dividend, and buying back bonds to help manage its debt as sales drop.
The job cuts cover 3.9 percent of its workforce and will help save $250 million this year and $400 million annually starting in 2010, the Cincinnati-based company said yesterday. It also plans to buy back as much as $950 million in bonds due this year.
Macy's is likely to slash nearly 200 jobs from its 30 stores across Massachusetts as part of a nationwide plan to reduce five or six employees from each store. It is unclear what will happen to Macy's two distribution centers in New England. A Macy's spokesman did not return calls and e-mails yesterday.
"The steps Macy's has taken today are a recognition by the company of how bad things are for the economy and for Macy's," Pete Hastings, a fixed-income analyst with Morgan Keegan Inc. in Memphis, said.
Macy's is reducing costs after discounts of 60 percent failed to stem revenue declines during the worst holiday season in 40 years. Profit in the year ending Jan. 30, 2010 will be about half of the prior year's, the retailer said.