One of the biggest department store chain in America, Macy's, decided to furlough majority of its 130,000 employees during coronavirus crises. More than 600 Macy's department stores were closed nationwide on March 18 in response to COVID-19 outbreak. The chain announced that all its stores will remain closed until there is clear instruction on when it is safe to reopen.
Macy's stated that in order to keep minimum workforce, majority of its employees will go through furlough starting for this week to maintain the basic operations. Employees will continue to receive health benefit till May. Since Macy's digital business will remain open, there will not be many granted leaves to support the distribution and call centres to serve online customers.
The chain also stopped paying quarterly dividend, hiring and paying, and brought down credit facilities to maintain the financial flexibility. Payment of Management Director and above level will be reduced starting from April 1. Meanwhile chairman and CEO, Jeff Gennette will also not receive any compensation during the crisis. "We will work with health officials and government to reopen the stores and bring back our employees safely," he said in press release.
Employees of other top brands facing furlough
Kohl's and Gap also announced to furlough most of its workers due to the same reason. All the store distribution centre associates as well as some corporate office associates have been temporarily furloughed due to extension of stores closures. Kohl's CEO, Michelle Gass considered not to recieve any salary during this period.
"These are unprecedented times as our communities around the country come together to support the nationwide efforts in slowing the spread of COVID-19. At Kohl's we are committed to doing our part as we extend the duration of our store closures to protect the health and safety of our customers and our associates," said Michelle.
Gap announced that the company will furlough its store teams in United States and Canada by pausing the pay until the stores reopens. Around 80,000 out of 129,000 employees will face the pause across all its brands including Banana Republic and Old Navy. Headcount of employees working in corporate functions will be reduced while Board of Directors will also receive the salary after reduction.