Macy's to cut 7,000 jobs

February 2, 2009 3:24:41 PM PST
Macy's says it will lay off 7,000 employees, which is about 4 percent of its workforce. It is not clear how many of the cuts will be in Chicago. Macy's was noticing a decline in some of its retails a year ago. Some customers in the Chicago area were upset that their local Marshall Field's department store turned into Macy's. To lure those customers back, and also to save money, Macy's decided to restructure its upper management.

Now saving money is more of a challenge because of the economy, so Macy's has decided to eliminate some of those administrative positions and several store positions.

"Things are bad everywhere. It's awful that is going to happen. It's unfortunate, but I mean, in the economy right now, we're struggling and hopefully it picks up here soon," said Carrie Compobasso, Macy's shopper.

"That's definitely sad. I guess it's the economy, it's just the way it is," said Shiovhan Burton, Macy's shopper.

Macy's customers reacted Monday to news that the department store is cutting 7,000 jobs nationwide. It's one of a few measures the company is taking to stay afloat in the tough economy.

"Let's think cuts as an indication of just how difficult it is out there. It's difficult for the people and difficult for the company. There is no good solution when people just aren't buying products like they were, say, two years ago," said John Challenger, Challenger, Gray and Christmas.

The work reduction includes positions in administration and stores, but it's not known yet whether the flagship store on State Street will be affected. In all, the job cuts will help save $250 million this year and $400 million annually starting in 2010.

"Let's hope the economy is near the bottom and things are going to start to get better if we took another dive, there would be more cuts. So many companies are taking measures like furloughs or cutting wages or hiring freezes to avoid layoffs. If it keeps continuing, at some point, you got to bite the bullet and make layoffs because the orders just aren't there," said Challenger.

So, for those employees who did survive the job cuts, there are changes for them as well. For example, for executives, there will be a freeze of pay raises, and it looks like some company perks might go as well, such as store discounts and co-paid life insurance.