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
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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