Macy's to cut 7,000 jobs
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Renowned US department store Macy's announced Monday it was shaving off 7,000 jobs in over 840 stores nationwide, in order to cope with the country's worsening "economic environment".
AFP - Leading US retailer Macy's said Monday it would impose 7,000 job cuts as it streamlined operations to cope with a deepening recession that had dampened American consumer spending.
The department store operator, which owns more than 840 stores nationwide, will also cut its 2009 capital expenditures budget by 30 percent to about 450 million dollars, from up to 600 million dollars.
"Reducing our workforce is an unfortunate outcome of the current economic environment," company chief executive Terry Lundgren said in a statement.
"In the short- and long-term, the actions being announced today will make us a more lean and efficient company and a stronger competitor," Lundgren said.
The 7,000 positions, or four percent of the company's total current workforce, are being eliminated from its offices, stores and other facilities nationwide, Macy's said. It includes about 1,200 new positions.
The company's board has also voted to reduce the Macy's quarterly dividend for shareholders to five cents per share from the current 13.25 cents.
The dividend reduction is expected to save the company 138 million dollars in cash in fiscal 2009, it said.
The series of actions are "designed to position the company for increased sales, profitability and cash flow" and "for accelerated growth once the economy recovers."
The United States is under prolonged recession and President Barack Obama, who took office two weeks ago, is seeking congressional approval for a massive stimulus package of more than 800 billion dollars to jolt the economy from its sharpest economic downturn since the Great Depression.
"In spite of the fact that the economic stimulus package currently being considered by Congress may improve the trend in consumer spending, we are planning conservatively to ensure our inventory, expenses and capital expenditures are appropriate," Macy's said.
The company expects sales in 2009 to fall between six and eight percent from 26.3 billion dollars notched in 2007.