American department store chain Macy's Inc is cutting 7,000 jobs - including 5,100 in its stores - and centralising some of its corporate operations in an effort to reduce costs amid an increasingly difficult retail environment.
Macy's shares fell 3 per cent in late trading on Monday after the job action announcement that affects 4 per cent of the company's total workforce. The company also projected earnings for the fiscal year just beginning that are well below analysts' estimates.
"Reducing our workforce is an unfortunate outcome of the current economic environment, and I am frustrated that so many of our people will be unable to move forward with us as we proceed into a very exciting future for Macy's and Bloomingdale's," Macy's CEO Terry Lundgren said in a statement.
The retailer estimates the restructuring efforts will reduce previously planned expenses by about $400 million a year beginning in 2010.
Macy's said the job cuts include nearly 40 per cent of executive positions in its central offices including 1,400 jobs in San Francisco, about 850 jobs positions in Atlanta and about 600 jobs in Miami.
Macy's Inc, which operates 840 department stores including its namesake Macy's stores and the higher-end Bloomingdale's chain, currently employs 180,000 people.
The company does not plan to close any additional Macy's or Bloomingdale's locations other than 11 Macy's stores whose shutdown was previously announced.
Regarding its new "centralised" structure, Lundgren said Macy's Inc will now have central offices overseeing buying, merchandise planning, marketing and stores operations. It will also unify operations for logistics, information technology and human resources.
Meanwhile, media reports said US bank Morgan Stanley too plans to cut about 3 per cent to 4 per cent of its work force, or up to 1,880 people, as it battles with spiralling costs and slowing business.
The bank plans more layoffs to combat rising costs and declining business, but none will come from financial advisor network, the reports said citing people familiar with the matter.
The bank slashed non-broker jobs in several rounds last year as Chief Executive John Mack tried to better equip Morgan Stanley for a period of lower revenue. In December the company reported a wider-than-expected quarterly loss of $2.2 billion.
Earlier this month, Citigroup Inc agreed to merge its Smith Barney brokerage with Morgan Stanley's wealth business.