Macy’s, which was already facing challenges before the coronavirus pandemic, announced it will be furloughing the “majority” of its 130,000 employees.
Most furloughs will be at Macy’s retail stores, which have been closed since March 18, 2020.
Other furloughs will also hit the company’s online business, distribution centers and call centers.
“Across Macy’s, Bloomingdales, and Bluemercury brands, we will be moving to the absolute minimum workforce needed to maintain basic operations,” the company said in a statement issued March 30, 2020.
Furloughed employees will remain eligible for the company’s health insurance plan through at least May — which includes the company covering 100% of the premium.
The company had taken steps that include suspending dividends, drawing on a line of credit and halting hiring and spending, canceling some orders and adjusting payment terms, but says it has lost “most” of its sales due to shuttered stores.
Online purchases account for about a quarter of the company’s net sales.
The chain had started seeing some promising news in what management had coined a “transition” — fourth quarter 2019 earnings per share were up to $2.12 versus the expected $1.96.
It registered $8.34 billion in revenue compared to the $8.32 bill expected and same store sales were down 0.5% versus the expected 0.9% dip.
However, the company lowered its 2019 sales and profit outlook and, at the same time, also warned that coronavirus — which hadn’t become a pandemic at that point, could harm its financials.
Macy’s had also been reporting a 24% rise per year in earnings per share for the past three years — good news for shareholders.
CEO Jeff Gennette had been receiving about $13 million in compensation — compared to a median salary of $6.7 million for similarly sized companies.