Faced with declining sales and competition from discounters, Macy's had to come up with a plan to survive in this bad economy.
On Monday Macy's in San Francisco was referring all questions to its corporate office in Cincinnati. Its employees in San Francisco weren't talking except among themselves.
Macy's new corporate strategy is to reduce expenses by $250 million this year and $400 million a year after that. It'll also eliminate 7,000 jobs companywide and 400 positions at Macy's West Headquarters in San Francisco will be affected.
In some areas of the country, 40 percent of the jobs lost will be executive positions. Shoppers ABC7 spoke with weren't surprised.
"So many stores are cutting back or closing and it's a sign off the economic times unfortunately," said a customer.
The job losses will hurt Sylvie Krawec, who owns the Crepe O' Chocolate cafe across the street from Macy's. Much of her business comes from the store's employees.
"When they come, they come twice a day, at least, at the very least three times a week," said Krawec.
Macy's says the downsizing will "Streamline decision-making, strengthen and simplify relations with vendor partners and eliminate duplication."
The company plans to centralize its nationwide operations in New York and Cincinnati. Shoppers in the Bay Area probably won't notice the changes, since there are no store closures planned here.
But professor Peter Bucklin, Ph.D., of U.C. Berkeley's Haas Marketing Group says West Coast suppliers will feel the pinch because the Macy's buying center in San Francisco will be closed.
"Those people are being shifted to New York where a centralized buying system for all of the various Macys stores is being constructed," said Bucklin.
Macy's will also reduce its quarterly dividend from 13.25 cents a share to five cents a share. That is to save money of course for this massive restructuring.
