Topline
The Bureau of Labor Statistics just reported that in February, retail trade dropped the second-highest number of jobs among private-sector employers on a seasonally-adjusted basis, yet that is just the tip of the iceberg, as outplacement firm Challenger, Gray & Christmas revealed that retail employers have announced over 45,000 layoffs ahead.
A store-closing banner hangs over the entrance to the Coco Republic store near Union Square in San … [+]
Key Facts
The retail industry dropped 6,300 jobs from January, while food services and drinking establishment employment declined by 27,500 positions, making this highly-discretionary spending category the leading private-sector job loser in February.
However, the BLS February numbers are a lagging indicator of the retail employment scene with nearly seven times as many retail job cuts announced so far this year as compared with last year – 45,375 to 6,751 respectively.
Andy Challenger, vice president of Challenger, Gray & Christmas, shared that the retail outlook isn’t “particularly rosy” with widespread layoffs – 221,812 year-to-date in all employment sectors – hurting consumer spending, “so retailers may feel the dip over the next few months.”
Retail bankruptcies have cost the most jobs, with Joann putting 19,000 employees out of work, Party City losing 16,000, and Big Lots eliminating ~1,000 positions with more expected.
Corporate restructuring in the name of efficiency has had a significant impact on management and support staff positions, including at Estée Lauder (eliminating up to 7,000 jobs), Starbucks (cutting 1,100), 7-Eleven (880 support operations workers), CVS (790), Walmart (700), Wayfair (340 on the technology team), Catalyst Brands/JCPenney and other brands (250) and Saks Global/Neiman Marcus (150).
Albertsons/Safeway, Forever 21 and Kohl’s are cutting their corporate workforce (225, 700, 250 respectively) and closing stores which will have a far greater impact on retail employment, e.g. Forever 21 is shuttering 200 stores and Kohl’s to close 27.
Ascena Retail Group/Ann Taylor and other brands will close 76 stores, Macy’s is shuttering 66 and Walgreens Boots Alliance plans 500 closures after being acquired by Sycamore Partners, though none of these companies have announced how many employees will be affected, but many thousands will be put out of work.
Other retailers planning cuts this year, include Barnes & Noble (100 workers), Guitar Center (62 employees), Rite Aid (~250) and REI (428).
Background
Retailers and the customers they serve face a rising number of uncertainties this year, particularly from how the Trump administration tariffs will impact their pocketbooks. Already wearied by inflation that gave retailers’ a topline boost last year but dramatically cut consumers’ spending power, the Consumer Confidence Index dropped sharply last month with consumers’ view of the labor market declining and their outlook on future business conditions taking a sharp downturn, according to The Conference Board.
Retailers’ Uncertainties Mount
While the National Retail Federation reports the U.S. economy entered 2025 with a “fair amount of momentum,” NRF’s chief economist Jack Kleinhenz warns that weakening consumer confidence could cause them to tap the brakes on spending, which will make it “difficult for companies to make investment and hiring decisions.” Policy shifts on immigration, deregulation and taxes further “blur the economic outlook.”
Retail Cfos Expect Profit Pressure
Business advisory firm BDO did a deep dive into the 2025 retail outlook in a post-election survey among 100 retail CFOs with firms ranging from $350 million to over $3 billion in revenues. It found that while 85% of retailers experienced topline growth in 2024, only 38% reported profit gains. More CFOs optimistically expect better profitability this year (47%), but are hesitant to pass along tariff-induced price increases to consumers, so they will need to find other ways to offset higher tariffs. Among the ways they will do that is through store closures (28% expect to streamline their brick-and-mortar footprint) and reducing headcount (18%).
Crucial Quote
“Despite significant growth in 2024, retailers did not actualize their expected profitability, revealing a critical disconnect between topline growth and botton-line results. As a result, profitability expectations are tempered in 2025. To improve financial performance, retailers will move beyond traditional price increases in search of new ways to expand margins,” according to the BDO report.
Tangent
According to Coresight Research, retailers are expected to close up to 15,000 stores this year, more than double the 7,325 closures in 2024. And retailers are projected to open fewer than 6,000 stores this year, sharply tilting the retail job outlook negative as the year progresses.
Further Reading
Latest Layoffs in Retail & E-Commerce Companies (Intellizence, 3/7/2025)
2025 Retail CFO Outlook Survey (BDO, 2025)
Job Cuts Surge on DOGE Actions, Retail Woes; Highest Monthly Total Since July 2020 (Challenger, Gray & Christmas, 3/6/2025)
