In a significant move impacting both employees and shoppers, Macy’s, one of America’s most iconic department stores, has announced plans to close five stores and lay off over 2,000 employees. The decision, outlined in a memo sent to employees and reported by the Wall Street Journal, marks a strategic shift for the retail giant.

Approximately 3.5% of Macy’s workforce, or around 2,350 positions, will be affected by the layoffs. The company attributes these job cuts to its initiative to streamline the supply chain through increased automation. The move towards automation is part of Macy’s broader effort to enhance operational efficiency.

The memo also revealed that Macy’s intends to outsource certain roles, although specific details about which positions would be affected were not provided. Alongside the layoffs, the retailer will close five Macy’s stores and sell two furniture locations earmarked for relocation.

The stores facing closure are located in Ballston Quarter, Arlington, Va.; Bayfair Center, San Leandro, Calif.; Kukui Grove Center, Lihue, Hawaii; Simi Valley Town Center, Simi Valley, Calif.; and Governor’s Square, Tallahassee, Fla. This decision aligns with Macy’s ongoing strategy to adapt to changing consumer behaviors and preferences.

The retail landscape has been undergoing a transformation, with traditional department stores facing challenges from evolving shopping patterns and increased competition from smaller, more agile retailers. In a bid to appeal to a younger demographic, Macy’s previously announced plans to accelerate its small-format store expansion, with 30 smaller stores slated to open across the U.S.

This move follows the August announcement where Macy’s revealed the opening of four small-format locations, each ranging from 30,000 to 50,000 square feet. These smaller stores represent about one-fifth of the size of Macy’s traditional outlets and are strategically positioned in the Northeast and Western regions.

Macy’s is actively repositioning its portfolio to stay competitive in the ever-changing retail landscape. The company faces challenges similar to those experienced by other major retailers, such as J.C. Penney and Neiman Marcus, both of which filed for bankruptcy in 2020. The COVID-19 pandemic has accelerated the decline of massive department stores, with even retail powerhouses like Bed, Bath & Beyond seeking Chapter 11 bankruptcy protection in the face of mounting losses.

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Note: Macy’s did not provide an immediate response to Fox News Digital’s request for comment.