Washington (AFP) – Iconic American department store chain Macy’s on Monday announced it would furlough most of its employees after the coronavirus outbreak forced it to close outlets.
“While the digital business remains open, we have lost the majority of our sales due to the store closures,” the company said in a statement.
“We will be moving to the absolute minimum workforce needed to maintain basic operations. This means the majority of our colleagues will go on furlough beginning this week.”
Shallower cuts will be made in the retailer’s online operations, the statement said, and the company will keep paying for furloughed employees’ healthcare “at least through May,” with the intention of hiring them back.
Macy’s was already struggling with the decline of American shopping malls as consumers increasingly shift to spending at online e-commerce behemoths like Amazon.
In February, it announced it would close 125 stores and lay off 2,000 people over the next three years, as part of a strategy to save $1.5 billion.
The virus had caused Macy’s to order its stores closed earlier this month, and in the statement it said it will keep all of its locations shut until “we have clear line of sight on when it is safe to reopen” including its Bloomingdales and Bluemercury brands.
“There will be fewer furloughs in our digital business, supporting distribution centers and call centers so we can continue to serve our customers online,” Macy’s said.
The layoffs will only add to the United States’s soaring unemployment rate, as the coronavirus outbreak caused initial jobless benefit claims to hit 3.3 million last week while lawmakers have launched a massive $2.2 trillion spending bill to blunt the economic hit.