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Macy's To Slash Jobs, Dividend

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By ANNE D'INNOCENZIO

The Associated Press

Published: February 3, 2009

NEW YORK - Macy's announced Monday it will cut 7,000 jobs, almost 4 percent of its work force, reduce its contributions to its employees' retirement funds and slash its dividend to preserve cash amid a severe pullback in consumer spending.

The Cincinnati-based department store chain also delivered bleak earnings and sales forecasts for the year.

Macy's said the cuts, which include some unfilled jobs and 1,900 positions being eliminated in a restructuring under way nationwide, will come at corporate offices, stores and other locations. The company employs about 180,000 people.

Macy's announced in January - on the heels of the worst holiday shopping season in decades - that it would close 11 stores, affecting 960 employees. The company expects the additional actions announced Monday to lower its annual selling, general and administrative expenses about $400 million starting in 2010.

Macy's also slashed its quarterly dividend to 5 cents from 13.25 cents. The dividend will be paid on April 1 to shareholders of record March 13.

Department stores have been hit hard by the poor economy as shoppers cut spending and turn to discount stores. In January, Fresno, Calif.-based department store chain Gottschalks Inc. put itself up for sale and said it had filed to reorganize in a Chapter 11 bankruptcy.

Dallas-based Neiman Marcus Group Inc. said this month that it is cutting about 375 jobs, or 3 percent of its work force.

Macy's announced the national rollout of a plan to localize merchandising to specific markets and said it would integrate all its geographic divisions into a single unit.

It began testing the localization strategy in 20 regional markets in the spring and expects the reorganization to be complete early in the second quarter.

As part of the restructuring, Macy's central buying, planning and senior management and marketing functions primarily will be located in New York.

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