Macy's to Cut 2,300 Jobs, Combine Three Divisions

Macy's to Cut 2,300 Jobs, Combine Three Divisions

Feb. 6 (Bloomberg) -- Macy's Inc., the second-biggest U.S. department-store chain, said it will eliminate 2,300 jobs and consolidate three divisions after reporting a drop in sales and lowering its earnings forecast.

The moves will cut annual expenses by $100 million starting in 2009, Macy's said today in a statement. The restructuring will cost the company $150 million in 2008.

Macy's sales growth slowed after the Cincinnati-based retailer bought May Department Stores Co. in 2005 for $11 billion. Chief Executive Officer Terry Lundgren said the restructuring will reduce expenses and boost sales.

``Our new strategies will speed up decision-making and simplify the process of working with our vendors,'' Lundgren, 55, said in the statement.

Macy's declined 95 cents, or 3.8 percent, to $24.15 at 2:07 p.m. in New York Stock Exchange composite trading. The shares have fallen 31 percent since the purchase of May Department Stores.

The retailer cut its fourth-quarter earnings forecast to $1.57 to $1.62 a share, excluding a tax benefit, from a previous projection of $1.70 to $1.80. The company said it won't meet its target for earnings before interest, taxes, depreciation and amortization in 2008 and 2009 because of a drop in sales growth.

Macy's said sales at stores open more than a year fell 7.1 percent in January, missing the company's forecast for a decline of 4 percent to 6 percent.

BLOOMBERG