US retailer Macy's to axe 2,300 jobs as economy slows

The US retailer Macy's said on Wednesday that it was cutting 2,300 jobs as it vies to overhaul its operations and cut costs amid a slowing economy.

Macy's, based in Cincinnati, Ohio, and one of the best-known retailers in the US, said the job cuts would mainly affect staff at three regional offices across the country.

"Employees laid off in this process will be provided severance benefits and outplacement assistance," Macy's said in a statement.

NEW POSITIONS

The retailer also announced that it would be creating 250 new positions as part of its shake-up.

It unveiled the job losses as it reported a 7.1 percent fall in same-store January sales, which it said was mainly due to a lower number of trading days compared with the same period a year earlier.

"Improving sales and earnings performance requires innovation in engaging our customer more effectively in every store as well as reducing costs," Macy's chief executive Terry Lundgren said.

JOB LOSSES

Macy's said that the overhaul of its regional offices would result in 950 job losses in Minneapolis, Minnesota, 850 posts in St. Louis, Missouri, and 750 positions in Seattle, Washington state.

Some of the job losses, however, would be offset by the 250 new jobs that were being established, Macy's said.

The retailer said that it was not planning to shutter any of its department stores.

But it said that it was envisaging a "challenging economic environment" in the coming year.

The company said that it would take a one-time pre-tax charge of US$150 million this year to account for expenses related to consolidation of its operations.