“In light of our disappointing 2015 sales and earnings performance, we are making adjustments to become more efficient and productive,” explained Macy’s Inc. chairman and CEO Terry J. Lundgren. To compensate the decreasing sales, Macy’s Inc. decided to flatten their organization and dismiss as many as 4,515 employees.

After the department store announced in September 2015 that they will be closing as many as 40 stores until early spring 2016, they took even harder measures.

Staffing at Macy’s and Bloomingdale’s stores nation wide will be reduced, affecting about 3,000 store associates, while about 165 senior executives in Macy’s and Bloomingdale’s central stores, office and support functions chose to leave the company as a voluntary separation opportunity. 1,350 additional positions in back-office organizations and call center services will also be eliminated. The changes are being implemented in early 2016.

"The cost efficiencies represent more than two-thirds of our goal of annual SG&A expense reduction of $500 million, net of growth initiatives, from previously planned levels by 2018. In some cases, there will be short-term pain as we tighten our belt and realign our resources,” so Terry J. Lundgren.

The implementation of these cost reductions is estimated to generate annual selling, general and administrative expenses (SG&A) of approximately $400 million, beginning 2016, it is supposed to help the company achieve modest improvement in its EBITDA rate compared to 2015.