On Wednesday, Macy’s announced it was cutting jobs as part of its effort in reorganization that will help the company save over $100 million each year.
Macy’s is planning to cut 2,500 jobs in its effort to save and sustain profitability. After the announcement, its stock was up in after hours trading by 5.5% on Wednesday. The department store chain said its savings would help them earn a profit for 2014 that is higher than analyst’s forecasts.
The announcement arrives on the heels of a holiday season that was strong for the famed department store chain. Macy’s also operates Bloomingdale’s the higher end chain.
Macy’s has stood out amongst its peers during the economic recovery reaping the benefits of a strategy tailoring its merchandise towards local markets.
However, like other companies, Macy’s has had to grapple with a consumer that is still cautious. The company is also attempting to response to the shift by shoppers toward purchasing and researching on their tablets, PCs and mobile devices such as smartphones.
While the retailer is cutting jobs, it will also reassign or make transfers for some of its workers. The company is also adding jobs related to shopping online, an area that is expanding for the retailer. Jobs in warehouses will also be added, which will leave its overall workforce at about the same 175,000.
The company based in Cincinnati plans to shutter five stores and open another eight, which will leave it with 844 nationwide.
The retailer announced it was shifting responsibilities for merchandising for its soft house categories such as towels and sheets from the district level to regional and national levels.
Macy’s said that those particular goods change less frequently than does clothing as well as accessories and become less subject to tastes on a local level.
These moves follow a solid shopping season for the holidays for the retail chain. Revenue at its stores that have been opened for 12 months or more, a key indicator of the health of a retailer, increased by 4.3% during November and December.
The company expects earnings for 2014 to be between $4.40 and $4.50 per share.