Important Business UpdateRestoreClose
To: All Macy’s, Inc. colleagues
From: Jeff Gennette, Chairman & CEO, Macy’s, Inc.
Important Business Update
Dear colleagues,
I hope this message finds each of you and your families safe and healthy. And I want to acknowledge up front that this is a very uncertain and stressful time for all of us.
The COVID-19 outbreak continues to take a heavy toll on our business. While the situation changes daily, most public health experts anticipate that we have several weeks before the crisis peaks, and the infection rate is moving at a different pace from state to state across the country.
The timeline to reopen stores remains unclear. We are hoping for the best but preparing for what current reality points to, which includes the possibility of our stores remaining closed through May. When we do reopen stores we expect a slower, staggered ramp-up.
My top financial priority is having cash sufficiency in our company during this crisis.
Our digital business and the supporting distribution and call centers remain open with continued enhanced safety measures. I thank the colleagues who continue this work.
Unfortunately, we are losing the majority of our business with the store closures. As you know, we’ve already taken needed measures to conserve cash, including suspending the dividend, drawing down our line of credit, freezing both hiring and spending, stopping capital spend, reducing receipts, extending payment terms, and evaluating all other financing options.
While these actions have helped, it is not enough. The economic reality is we need to significantly and quickly reduce payroll. Beginning this week, in every part of our business across all three brands – Macy’s, Bloomingdale’s, and bluemercury – we will be moving to the minimum number of colleagues necessary to maintain basic business operations. We will be placing a majority of our colleagues on furlough. Furlough selection is not based on colleague performance or tenure.
Putting our colleagues on furlough is a gut-wrenching decision that adds further stress on you and your families. I wish there was an alternative, but this is the best route to keeping our company intact while our stores are closed.
Let me explain what this means to you and provide some context on further actions we’re taking.
What does a furlough mean?
A furlough requires a colleague to temporarily suspend all work activity. Furloughed colleagues remain employed by the company but without pay, PTO and 401k contribution. We will call furloughed colleagues back to work as business resumes. We expect to bring colleagues back on a staggered basis, based on need, with the cadence of reopening stores.
Colleagues will continue to receive health benefit coverage if you currently participate in a Macy’s, Inc. plan. The company will cover 100% of your premium costs through May, if needed. This includes coverage for any dependents who are currently on your benefits plan.
Furloughed colleagues are eligible to take advantage of unemployment insurance and other state and federal relief programs where available. This includes the enhanced unemployment benefits included in the federal CARES Act that was signed into law on Friday.
Each colleague will hear about your status from your People Leader and receive an email from HR that will be issued today.
We will get through this crisis.
The CARES Act makes $450B in financing available to corporations impacted by COVID-19. Over the course of this week, we will be learning how access to that funding will be administered and what it means for Macy’s, Inc. We continue to explore other financing options as well.
As the situation evolves and decisions are made, you have my commitment to keep you informed. You can find more information in our FAQ and policy documents posted on the COVID-19 page of My IN-SITE.
I love this company and our incredible people. I look forward to the day when this crisis is behind us and we can resume our normal lives.
My wish is for everyone’s health and safety as we navigate this crisis together.
With respect,
Jeff
The content contained in this document may or may not apply to colleagues who are subject to a collective bargaining agreement.