Macy's plans to cut 7,000 jobs in the aftermath of a brutal holiday shopping season. The job cuts total 4% of the retailer's work force and will occur at stores, corporate offices and other locations. Macy's also said that as part of a restructuring it will cut contributions to employee retirement accounts and lowered its dividend to 5 cents from 13.25 cents.
Even executives aren't immune: They won't be getting their merit salary increases this year. The retailer previously said it would close 11 stores.
Shoppers continue to flock to discount stores for what they need, rather than to more upscale retailers. Even deep discounts at Macy's and other retailers aren't enough incentive to get customers to spend. A couple weeks ago I saw signs in Macy's offering up to 80% off racks and racks of designer merchandise, but hardly anyone was buying. In fact, the Commerce Department's latest report shows that consumer spending fell for the sixth month in a row in December and that the personal savings rate actually rose to 3.6% that month.
The job cuts at Macy's and other retailers continue to spell bad news for workers who have been laid off and bank on retail positions to pay some bills while they job hunt, as well as those who want a part-time gig to supplement their income. Fewer signs advertising job openings hang in the windows of department stores these days and that isn't likely to change soon. Furthermore, people I know who work in retail and used to complain about the low pay are now holding on for dear life and praying they'll escape the ax.
Francine Huff is the author of "The 25-Day Money Makeover for Women" and popular speaker. Visit her Web site, www.Huffwrites.com.