Macy’s furloughs are a sign of COVID-19 troubles for big retailers
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Macy’s is telling the majority of its 125,000 employees that they’ll be furloughed, starting as soon as this week, because of the COVID-19 pandemic.
All of the company’s 775 locations, including Bloomingdale’s and Bluemercury beauty stores, have been closed since March 18, with no opening date in sight.
Macy’s says it’s already done what it can financially, like drawing from its line of credit and suspending dividend payments. Now it has to reduce its workforce.
Joel Bines, managing director at AlixPartners, says we should expect other department stores to follow suit, and also ask for rent deferrals, as we roll over into a new month and payments are due.
“This is the week that we’ll begin to see some of those announcements start to come out, either formally or informally,” Bines said.
The digital side of Macy’s business will remain open, including its distribution and call centers. Denise Dahlhoff, senior researcher at The Conference Board, says a lot of big retailers are already trying to sell this season’s clothes at a discount online.
“Much of the merchandise is sitting in stores now, so when stores reopen there will be older merchandise that retailers want to clear,” Dahlhoff said.
Macy’s says its furloughed employees will get health insurance through May, and it hopes to bring people back on a staggered basis as soon as it’s able to resume business.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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