In a significant overhaul of its business model, Macy’s, the venerable 166-year-old department store chain, has unveiled plans to close 150 locations across the United States and lay off more than 2,300 employees. This move, described by the company as the beginning of a “bold new chapter,” signals a strategic pivot towards luxury stores while phasing out a substantial portion of its traditional retail footprint.
The announcement, which detailed the closure of 50 stores by year’s end and an additional 100 by 2026, has left the retail industry and its workforce reeling. Macy’s, once a paragon of American retail, cited economic pressures from competitors like Amazon, online brands, and discount stores such as TJ Maxx as the catalyst for this drastic shift.
Les Leopold, co-founder of the Labor Institute, pointed to the company’s focus on appeasing Wall Street as a fundamental cause of the restructuring. “They siphoned off the corporation’s wealth to Wall Street stock sellers and top officers. That virtually guaranteed that Macy’s would have to close stores and layoff thousands of workers, in effect, paying for all those stock incentives,” Leopold explained.
Since October 2019, Macy’s has diverted $1 billion into stock buybacks, a move Leopold criticized for prioritizing shareholder returns over reinvestment in the company and its employees. This practice, he argues, has “legally looted” the company, enriching executives and investors at the expense of the broader workforce and the company’s long-term viability.
The impact of these layoffs and store closures extends beyond the company’s balance sheets, touching the lives of thousands of Macy’s employees. Reports from Macy’s flagship store in San Francisco’s Union Square depicted a scene of shock and despair among workers upon hearing the news. “When I went to the first floor in cosmetics, I saw everybody’s faces,” one team member recounted. “They just seemed so worried. Some of them were so red, some of them looked like they wanted to cry.”
This sentiment was echoed by another employee, who lamented the lack of transparency and suddenness of the announcement: “With ‘visibly shaky hands,’ a manager told employees Tuesday morning that the store was planning to sell the building and close.”
The broader implications of Macy’s decision highlight a troubling trend in the retail industry, where companies increasingly prioritize short-term gains for shareholders over the long-term health of the business and its employees. This approach, according to Leopold, is symptomatic of a wider economic malaise characterized by growing inequality and corporate greed.
Despite the profound impact of such corporate strategies on workers and communities, there has been a notable silence from political leaders on both sides of the aisle. “Both political parties are totally silent” on the issue of mass layoffs and job loss, Leopold observed, suggesting a pervasive influence of Wall Street across the political spectrum.
The timing of Macy’s announcement coincides with legislative efforts to curb the practice of stock buybacks, such as the Stock Buyback Accountability Act introduced by Sens. Ron Wyden (D-Ore.) and Sherrod Brown (D-Ohio). This proposed legislation seeks to raise the tax on stock buybacks from 1% to 4% to disincentivize companies from engaging in this practice. However, without significant political will and action, such measures remain stalled, leaving companies like Macy’s to continue their current trajectories.
As Macy’s embarks on this new chapter, the story of its restructuring offers a cautionary tale about the consequences of corporate strategies that favor Wall Street over Main Street. The plight of Macy’s workers, blindsided by the closures and layoffs, underscores the human cost of corporate decisions driven by stock performance and shareholder demands.
In reflecting on the broader implications of Macy’s restructuring, Leopold encapsulated the sentiment of many who observe the unfolding situation with concern: “The crisis now faced by thousands of Macy’s workers is the same story playing on an endless looped tape throughout every industry and sector. It’s the source of runaway inequality.”
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