Macy's (M) will begin furloughing employees this week as it looks to reduce its losses after closing its stores because of the coronavirus. The retailer made the announcement on Monday, saying that it would only keep the bare minimum of workers employed to maintain operations.
While Macy's did not say how many employees would put on leave, the company reportedly employs about 130,000 workers across the company with 551 Macy's department stores, 34 Bloomingdale's stores, 19 Bloomingdale's outlets, and 171 Bluemercury shops in operation.
The "heavy toll" that the COVID-19 outbreak has put on Macy's sales has caused the company to suspend its dividends, draw on its line of credit, freeze hiring and spending, cancel orders, and extend its payment terms. But Macy's said, "it is not enough."
"Across Macy's, Bloomingdales, and Bluemercury brands, we will be moving to the absolute minimum workforce needed to maintain basic operations," the company said in a statement. "This means the majority of our colleagues will go on furlough beginning this week. There will be fewer furloughs in our digital business, supporting distribution centers and call centers so we can continue to serve our customers online."
Furloughed employees will continue to receive health benefits at least through May, with the company covering 100% of the premium, it said.
Macy's expects to bring back employees on a "staggered basis as business resumes." The company closed its stores on March 18 and has no current plans for when locations will open again.
Shares of Macy's stock were down 1.18% as of 2:00 p.m. EDT on Monday.
