In rather alarming though not entirely surprising news, department store giant Macy's (NYSE: M) has been unrolling its plans in cutting thousands of jobs while simultaneously paying out multi-million dollar bonuses to top executives.
Indeed, after laying off about 25% of the chain's corporate workforce, Macy's awarded six of its top executives a total of $9.6 million in equity.
News of Macy's plan to permanently close 125 stores and cut 2,000 corporate jobs broke following the declaration of COVID-19 as a pandemic in February. Later in June, another announcement hit that Macy's would cut an additional 3,900 jobs.
One month later in July, directly following all of the company's corporate layoffs, Macy's awarded several leading executives at the company multi-million dollar stock awards. More specifically, bonuses ranged from $350,000 to $3 million.
According to the Securities and Exchange Commission (SEC), Macy's CEO Jeff Gennette received a stock bonus worth $3.7 million. Another top executive who received stock bonuses includes Danielle Kirgan, human resources chief, who was awarded $3.2 million in stock options. In addition, COO John Harper, CFO Felicia Williams, and chief legal officer Elisa Garcia were collectively awarded shares worth $2.6 million.
Despite store closings and difficulties following a decrease in sales and profit largely due to economic complications resulting from the COVID-19 pandemic, Macy's reinstated its company's C-suite salaries to their full salaries in April. For CEO Jeff Gennette, that means $1.3 million in annual salary, a figure that doesn't include his stock bonus of $3.7 million this year.
Macy's staggering number of recent layoffs follows massive furloughs once stores were closed on March 18 due to the pandemic. While stores began to gradually reopen on May 4, Gennette anticipates that Macy's will likely not return to what it was even once restrictions are lifted.
"We know that we will be a smaller company for the foreseeable future," said Gennette in a statement, "and our cost base will continue to reflect that moving forward. Our lower cost base combined with the approximately $4.5 billion in new financing will also make us a more stable, flexible company."
In addition to raising $4.5 billion in funding to help offset the effects of the pandemic, Macy's expectation is that the company's total layoffs will result in a savings of $365 million for the 2020 fiscal year.