Hard times are here and Macy's is taking the hit when it's planning to slash jobs. What is to blame? Online shopping has taken the market strongly in the last holiday quarter of 2015.
Consumers are now shifting to online stores and shying away from physical retail stores because of the convenience it has brought, mostly during the holiday season.
Macy's, being the largest department store chain announced that it is downsizing the company, cutting off 4,800 jobs. It's also refocusing its profit outlook for the year after a non-profitable holiday in 2015.
Ken Perkins, the President of Retail Metrics - a retail research firm, that there has been a noticeable shift toward online and mobile phone consumerism. Perkins says,
I think Macy's is likely to be a canary in a coal mine.
Which means its signaling the inevitable approach towards customer experience and convenience in online and mobile platforms.
Unfortunately, job cuts are from the 40 stores closing which totals to 2,710 employees. Another 2,110 job cuts will be from reducing back office operations.
Recently, the company announced it is closing its North Carolina branch in Cary which will terminate 63 employees.
Analysts like Perkins have predicted that retailers will continue to minimize their physical stores while online stores are booming.
To combat this loss, Macy's has been hard at work expanding its online services. While its physical stores suffer, Macys.com and Bloomingdales.com (another operation of Macy's) has a stronger hold on the consumer market which filled close to 17 million orders online. Recent reports indicate that the chairman and chief executive of Macy's, Terry Lundgren, had this to say about Macy's plans for the future.
...our eye is on a long-term vision of Macy's Inc. as a dynamic retailer that serves existing customers and acquires new ones through innovative approaches.
This statement is Macy's goal to recover from last year's profit loss.
