Retailer Macy's (NYSE:M) is furloughing most of its workers, according to a press release from the company on Monday. The iconic New York City company operates around 775 stores across the U.S., and all have been closed since March 18 in response to the coronavirus pandemic. In light of this difficult situation, it had already decided to improve its liquidity by suspending its dividend and cutting capital expenditures, among other things. But, said management, "[w]hile these actions have helped, it is not enough."
Macy's employs close to 130,000 people across its retail brands, which include Macy's, Bloomingdale's, and Bluemercury. The furlough applies equally across all of them. Only personnel essential for e-commerce, distribution centers, and call centers will remain on the job.
E-commerce is doing all the work
What's happening is hardly unique to Macy's. Across consumer-discretionary retail, companies are trying to endure severely reduced revenue as stores close and shoppers quarantine. But Macy's revenue hasn't gone completely to zero since it has a substantial e-commerce operation. In 2019, the company's digital sales came in around $6 billion -- about 24% of its total revenues.
While it's possible that Macy's digital sales have seen a slight uptick in recent weeks, e-commerce isn't enough to support the company's massive workforce. Therefore, the company is furloughing the majority. Only those essential to those operations still ongoing will keep getting paid, though the company didn't disclose how many employees that will be.
Macy's hopes to bring back its furloughed workforce once it is safe to reopen its brick-and-mortar locations. And Macy's employees certainly hope that time will come soon. For those employees who get benefits, Macy's has said it will continue to supply health insurance, and cover their full premiums, through May.