Macy’s said the majority of its employees will be furloughed beginning this week as it copes with significant sales losses during the coronavirus pandemic.
The retailer declined to say how many employees will be affected by the furloughs. It said it’s lost most of its sales, even as it remains open online, and that’s why cost cuts are necessary.
In a statement on Monday, Macy’s listed the many steps it’s already taken to try to shore up its finances. It has suspended its dividend, drawn down a line of credit, frozen hiring and spending and canceled some orders, among others.
“While these actions have helped, it is not enough,” the company said in a statement. “Across Macy’s, Bloomingdale’s, and Bluemercury brands, we will be moving to the absolute minimum workforce needed to maintain basic operations.”
The company said it is evaluating all other financing options.
Macy’s is one of dozens of retailers that have been forced to close stores to slow the spread of the coronavirus in the U.S. Like Macy’s, many have continued to sell online. Without brick-and-mortar locations, though, they have lost the engine that still fuels most customer purchases.
As of the latest reported quarter, Macy’s was operating 551 Macy’s department stores, 34 Bloomingdale’s locations, 19 Bloomingdale’s outlets and 171 Bluemercury shops, according to its website. The company had roughly 130,000 employees, excluding seasonal staff, as of Feb. 2.
All of Macy’s stores have been closed since March 18. The company has not decided when they’ll be safe to reopen.
Macy’s said it will have fewer furloughs on the digital side of its business, such as in its distribution centers and call centers. It said furloughed employees enrolled in health benefits will continue to receive coverage, with the company paying 100% of the premium.
“We expect to bring colleagues back on a staggered basis as business resumes,” it said.
— CNBC’s Lauren Thomas contributed to this story.
This is a developing story and will be updated.