Macy's job cuts: 2,500 (but it's adding online jobs)

Macy's job cuts announced Wednesday are part of a reorganization effort that will save the company $100 million annually. Besides the Macy's job cuts, it will close five stores. But Macy's will open eight others and add positions in online shopping. 

AP Photo/Mark Lennihan, File
In this December file photo, Macy's department store in Herald Square is illuminated with holiday lighting in New York. Macy's job cuts of 2,500 workers were announced Wednesday as part of a money-saving restructuring.

Macy's Inc. is cutting 2,500 jobs as part of a reorganization to sustain its profitability.

Shares rose 5.5 percent in after-hours trading Wednesday.

The announcement comes on the heels of a strong holiday shopping season for the department store chain, which also runs the higher-end Bloomingdale's chain.

Macy's said the moves will save it $100 million per year and forecast a 2014 profit above Wall Street's forecasts.

Macy's has been a standout among its peers throughout the economic recovery and has reaped the benefits of its strategy of tailoring merchandise to local markets. But like other merchants, Macy's is grappling with a still cautious shopper. It's also trying to respond to shoppers' shift toward buying and research on their PCs and mobile devices like smart phones.

While Macy's will cut jobs, it is also planning to reassign or transfer some workers. It's also adding positions related to online shopping, a growing area for the company, and warehouses. That will leave its workforce level at about 175,000.

The Cincinnati-based company plans to close five stores and open eight others, leaving it with 844 stores nationwide once the changes are complete.

It's also shifting merchandising responsibilities for "soft home categories" like sheets and towels from the district level to the regional and national level. Macy's says that such goods change less often than clothing and accessories and are less subject to local tastes.

The moves come after a solid holiday shopping season for the chain. Revenue at stores opened at least a year, a key indicator of a retailer's health, rose 4.3 percent in November and December.

The company is optimistic about this year. It expects earnings per share of $4.40 to $4.50 in 2014, besting analysts' prediction of $4.36 per share, according to FactSet.

Shares rose 5.5 percent to $54.70 in after-hours trading after closing down 34 cents to $51.84.

Follow Anne D'Innocenzio at www.Twitter.com/adinnocenzio

AP Business Writer Sara Sell in Portland, Oregon, contributed to this report.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.