Shares of department-store giant Macy's (NYSE:M) were down on Tuesday, after the company said it is furloughing most of its 130,000 employees as stores remain closed due to the coronavirus pandemic.
As of 2:30 p.m. EDT, Macy's shares were down about 7.9% from Monday's closing price.
In a statement on Monday, Macy's said it is "moving to the absolute minimum workforce needed to maintain basic operations," including its online store.
Translation: Many, perhaps most, of the company's 130,000 employees are being furloughed. They'll receive no pay for the duration, but Macy's will continue to provide healthcare benefits for those employees who receive them "at least through May," it said.
All of Macy's U.S. stores -- close to 800 -- have been closed since March 18, as the company heeded advice from health experts to shut down to help limit the spread of the COVID-19 virus. Initially, Macy's said it would close its stores until March 31, and promised to "provide benefits and compensation" to store employees through that period.
But now that it's clear that stores will have to remain closed for at least several more weeks, Macy's felt it had to take more drastic action.
Understandably, Macy's is doing everything it can to conserve its cash, but there isn't much left to be done from here. The company has already frozen spending, eliminated its dividend, cut pay for managers and executives, canceled some orders, and drawn down its credit facility.
While its online stores remain open, it's clear that those aren't bringing in much revenue at the moment. Simply put, investors should be clear that Macy's is in survival mode for now.