What: February 2025 sees retail sector post second-highest private-sector job losses amid widespread corporate restructuring, with announced layoffs seven times higher than previous year and projected store closures to exceed 15,000.

Why it is important: The scale of workforce reduction and store closures reflects the retail sector's urgent need to restructure operations, with only 38% of retailers reporting profit gains despite topline growth in 2024. The retail industry is experiencing a significant transformation marked by widespread layoffs and store closures. February's employment data reveals retail as the second-highest sector for job losses, with over 45,000 layoffs announced year-to-date compared to just 6,751 in the previous year. Major retailers are implementing substantial restructuring plans, with Joann cutting 19,000 positions, Party City eliminating 16,000, and Estée Lauder reducing up to 7,000 jobs. Corporate restructuring has particularly impacted management and support positions across companies like Starbucks, 7-Eleven, CVS, and Walmart. Store closures are accelerating, with Coresight Research projecting up to 15,000 closures in 2025, more than double the previous year's figure. This trend is driven by multiple factors, including weakening consumer confidence, tariff uncertainties, and the challenge of maintaining profitability despite topline growth. Retailers are seeking alternative ways to offset higher costs, with 28% planning to streamline their brick-and-mortar footprint and 18% reducing headcount.

IADS Notes: The current retail restructuring wave reflects deeper industry challenges. As noted in December 2024, major retailers like Macy's have accelerated their store closure plans, while department stores have seen their market share plummet to less than 3%. The industry's response varies from operational restructuring, as seen with Kohl's closure of 27 stores, to strategic consolidation through mergers like Saks and Neiman Marcus. The severity of these challenges is further emphasised by Hudson's Bay's recent bankruptcy filing, demonstrating the widespread nature of retail sector pressures.

Retail layoffs surge as retailers adjust to mounting economic and profitability pressures