To: All Macy’s, Inc. colleagues
From: Jeff Gennette, Chairman & CEO
Important Business Update
Dear colleagues,
I have significant updates to share with you today. But first, I want to express my gratitude for your dedication throughout this crisis. Whether you were working in our distribution centers or call centers, getting our stores up and running again, helping to manage the business from home, or remaining engaged with the business while on furlough – thank you.
It is also important to acknowledge that we have been through a lot over the past few months. Earlier in the year, we announced our Polaris strategy which included major structural changes across the organization. At the time, I was confident that these changes positioned our business for success. Then, a month later, the COVID-19 pandemic hit. And with that, everything changed. Our business has been impacted in ways we could never have imagined. Our focus immediately shifted to the safety of our colleagues and customers as well as the survival of our Company. Our stores closed – which was unprecedented in Macy’s history. The majority of our colleagues were furloughed. Many of us were required to shelter in place.
Our attention then shifted to:
Cutting our weekly cash burn rate including significantly reducing payroll through the furlough process
Refinancing for liquidity which gave us the flexibility we need, but also means we’re more leveraged (in debt)
And today, we are taking action to get our cost base aligned with our anticipated sales
While the store re-openings are going well, we do expect this to be a gradual recovery. Because of the unprecedented and ongoing business and operational impact of the COVID-19 pandemic, every area of the business is making the necessary reductions that will enable the company to endure the continuing economic headwinds.
These changes align the organization and our resources with the realities of the business today.
As you’ve heard me say before, Macy’s, Inc. will emerge from this crisis as a smaller, more leveraged company. We are reducing our corporate and support headcount by approximately 3,900 and taking reductions in staffing across the stores portfolio.
Colleagues who are impacted by this reduction will be communicated to today by their leader. All colleagues will receive an IN-SITE message as well letting you know of your status. The last day for those departing will be June 30. Colleagues coming back from furlough will begin to do so starting the week of July 5.
We are saying goodbye to many valued colleagues and good friends. I want to thank each impacted colleague for the contributions they have made to the company. For those who have been on furlough since April, thank you for your commitment during an incredibly challenging time. And for the colleagues who have been working with us through this crisis, know that you have my utmost gratitude for all of your work and dedication.
While the past three months have been stressful as we navigated the unknown in our personal and professional lives, I can look back and say that, as a business, we’ve come out stronger. As we re-open our doors, we have the strength and agility to respond successfully to ongoing uncertainty. We are more connected. We’ve secured our finances. Our .com business is performing well. We’re smarter about our business needs and our customers’ needs.
I am confident Polaris remains the right strategy. However, we are examining all aspects of the strategy to determine where we accelerate, where we continue but with an adjusted focus, and where we pause initiatives. Today you will hear from your leaders about specific changes in your teams and how we will work together moving forward. We have also created a microsite for more information where you can read about various functional changes.
We have a hard road ahead of us. But Macy’s, Inc. is a company worth fighting for. I recognize that it will be difficult to adjust to this new normal, but I ask that we all stay focused and work together. Because I know if we do, we will come back, stronger than ever.
With respect,
Jeff
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