Macy’s, which has been operating for over 165 years with a retail footprint of more than 450 stores in the U.S., has been struggling to win over customers amid economic uncertainty over the past few years, despite recent efforts to reverse this concerning trend.
Macy’s, which also owns Bloomingdale’s and Bluemercury, revealed in its most recent earnings report that its net sales dropped 0.6% year over year in the third quarter of 2025, which was amid the holiday season.
Specifically, net sales at namesake Macy’s stores decreased by 2.3%. Also, recent data from Placer.ai showed that foot traffic at Macy’s locations during the quarter declined by almost 11% year over year.
As sales and foot traffic continued to dip, Macy’s reported a 60% decline in net income compared to the same period in 2024.
“Looking at the evolving retail landscape, consumers are more discerning about how and where they spend their dollars,” said Macy’s CEO Antony Spring during an earnings call last month.
The weaker consumer demand follows Macy’s decision to raise prices in its stores last year due to tariffs. This was a risky move, since many Americans have been pulling back on spending amid concerns about the state of the U.S. economy.
Amid tariffs and inflation, 59% of consumers feel cautious, pessimistic or panicked about the economy.
Approximately 71% cited higher prices as their top concern, while 47% cited unpredictable price increases.
Also, 38% are seeking deals more often, while 34% are spending less overall.
Source: Wunderkind
“U.S. shoppers are proving more strategic than ever,” wrote Danny O’Reilly, senior content architect at Wunderkind, in a blog post. “What began as short-term caution has now crystallized into a new retail reality: value is the priority, trust is the differentiator, and digital fluency defines how, and where consumers spend.”
As Macy’s struggles to attract customers, it has decided to quietly cut back its supply chain. The department store chain is closing its fulfillment center in Cheshire, Connecticut, according to a WARN notice submitted on Jan. 13.
The closure will result in 993 layoffs, which will occur in phases over the next few months as operating units shut down at the center. The job cuts will be based on employees’ shifts and the unit they work in.
Specifically, night operations and talent acquisition employees will be laid off on March 14. Part-time operations employees who work on the weekends and throughout the day will be let go on April 4.
Those who work full-time in weekend operations will be laid off on Aug. 1. Also, full-time operations employees who work throughout the day will be cut on Aug. 29, along with those in maintenance and asset protection.
Related: Macy’s sees holiday shopping red flags
However, Macy’s stated in the notice that “a small number” of maintenance and asset protection workers will remain employed through April 16, 2027, to “handle the decommissioning process.”
The closure from Macy’s comes after it submitted a WARN notice on Jan. 12 that reveals its plans to close the remaining operating units at a distribution center in South Windsor by March 14, resulting in the layoffs of 57 employees.
The company also revealed earlier this month that it was closing its fulfillment center in Tulsa, Oklahoma, this spring.
Macy’s recent cost-cutting moves come as it continues to implement its Bold New Chapter strategy, which was announced in 2024. It involves reimagining the Macy’s nameplate, elevating its product assortment, and simplifying and modernizing end-to-end operations.
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Through this strategy, Macy’s said it plans to “rationalize and monetize the supply chain asset portfolio, streamline fulfillment, improve inventory planning and allocation, and deliver a scalable technology platform,” according to a 2024 press release.
During an earnings call in 2024, former Macy’s Chief Financial Officer Adrian Mitchell said the strategy is expected to generate $235 million in cost savings by the end of this year.
Macy’s also plans to complete 150 store closures during this period.
“In executing our strategy, we continue to review our portfolio and make careful decisions about where and how we invest, including closing underproductive stores and streamlining operations,” said Spring in a memo to employees on Jan. 8 this year.
Macy’s recent closures and job cuts come as more companies are restructuring their workforces amid economic challenges and the rise of artificial intelligence, according to a recent survey from Resume.org.
Approximately 55% of companies expect to conduct layoffs in 2026.
Specifically, 48% said layoffs will definitely or probably occur during the first quarter of the year.
Also, 44% of companies said artificial intelligence was the top reason for layoffs, while 42% said reorganization/restructuring and 39% said budget constraints.
Additionally, 6 in 10 companies admit they highlight AI to make hiring freezes or layoffs more palatable.
Source: Resume.org
“What we are seeing is workforce rebalancing,” said Kara Dennison, head of career advising at Resume.org, in a statement. “Companies are laying off in areas that no longer align with near-term priorities while hiring aggressively in functions tied to revenue, transformation, and efficiency.”
“Most organizations are reducing roles that are higher-cost, slower to yield ROI, or misaligned with new operating models,” she continued. “That often includes layers of middle management, duplicated functions after reorganizations, and roles tied to legacy processes. At the same time, they’re investing in roles that support growth, automation, data, customer retention, and execution speed.”
Related: Lululemon struggles to reverse concerning customer behavior
This story was originally published by TheStreet on Jan 24, 2026, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.
