Both Dems and GOP 'Completely Silent' as Macy's Guts Workforce After Rewarding Wall Street

As the iconic 166-year-old department store chain Macy's this week announced a "bold new chapter" including a pivot to luxury stores, the closing of 150 locations across the United States in the coming years, and more than 2,300 layoffs, one labor expert is blaming the company's deference to Wall Street and an economy in which firms prioritize stock buybacks over investing in their workforce.

The company announced Tuesday that it will close 50 stores by the end of the year and another 100 by the end of 2026, leaving just 350 stores across the country.

The chain also said last month that it plans to lay off 2,350 workers, or 3.5% of its workforce, under economic pressures brought on by Amazon, online brands, and discount stores such as TJ Maxx.

"They siphoned off the corporation's wealth to Wall Street stock sellers and top officers. That virtually guaranteed that Macy's would have to close stores and layoff thousands of workers, in effect, paying for all those stock incentives."

Macy's stock price has dropped 75% from its peak in 2015, pushing it to close nearly a third of its locations in less than a decade, but Les Leopold, co-founder of the Labor Institute, argued Wednesday that the company could have responded to changes in the retail market by "reinvesting to modernize and become more competitive," but didn't—"a classic story."

"Instead, they siphoned off the corporation's wealth to Wall Street stock sellers and top officers," Leopold told Common Dreams. "That virtually guaranteed that Macy's would have to close stores and layoff thousands of workers, in effect, paying for all those stock incentives."

Since October 2019, said Leopold, Macy's has "put $1 billion into stock buybacks" to elevate its shareholders' returns—about 20% of the company's current value.

Leopold—author of the new book Wall Street's War on Workers: How Mass Layoffs and Greed are Destroying the Working Class and What To Do About It—said that buybacks allow executives and investors to "legally loot a company" by "returning wealth to large Wall Street firms and top Macy's officers who received about two-thirds of the income through stock incentives."

Stock buybacks, which were considered an illegal form of stock manipulation until regulatory rollbacks under the Reagan administration, is a driver of mass layoffs like those announced by Macy's, said Leopold, noting that the Department of Labor identifies a layoff from a job as "one of the most traumatic events you can experience in life."

As SFGate reported on Wednesday, Macy's employees at the company's flagship store in San Francisco's Union Square were "blindsided" to learn the location was one of the stores planned for shuttering.

With "visibly shaky hands," a manager told employees Tuesday morning that the store was planning to sell the building and close.

"When I went to the first floor in cosmetics, I saw everybody's faces," one team member told the outlet. "They just seemed so worried. Some of them were so red, some of them looked like they wanted to cry."

The crisis now faced by thousands of Macy's workers "is the same story playing on an endless looped tape throughout every industry and sector," Leopold told Common Dreams. "It's the source of runaway inequality."

He expressed hope that "a movement will be built to stop it" but pointed out that despite widespread concerns about the economy among voters in a high-stakes election year, "both political parties are totally silent" on the issue of mass layoffs and job loss.

"Wall Street rules the roost," Leopold said.

Macy's announcement came a year after Sens. Ron Wyden (D-Ore.) and Sherrod Brown (D-Ohio) introduced the Stock Buyback Accountability Act, which aims to disincentivize companies from pouring their profits into buying back their own stock by raising the tax on the purchases from 1% to 4%, but the Senate has not taken action on the legislation.