On January 4, 2017, Macy’s, Inc., faced with declining revenues and profits announced a series of actions it planned to implement to try to improve its operations. In its press release the company reported:

Macy’s, Inc. today announced a series of actions to streamline its store portfolio, intensify cost efficiency efforts, and execute its real estate strategy. These actions bolster the company’s strategy to further invest in omnichannel capabilities, improve customer experience and create shareholder value. The actions include:

• The closure of 68 stores and the reorganization of the field structure that supports the remaining stores, reinforcing the strategy of fewer stores with better customer experience. These store closures are part of the approximately 100 closings announced in August 2016.

• The significant restructuring of the Macy’s, Inc. operations to focus resources on strategic priorities, improve organizational agility and reduce expense.

• The sale of properties consistent with the previously announced real estate strategy. The actions announced today are estimated to generate annual expense savings of approximately $550 million, beginning in 2017, enabling the company to invest an additional $250 million in growing the digital business, store-related growth strategies, Bluemercury, Macy’s Backstage and China. These savings, combined with savings from initiatives implemented in early 2016, exceed the $500 million goal communicated in fall of 2015, one year earlier than expected.

Required

Assume that you are Macy’s vice president of human relations. Write a letter to the employees who are affected by the restructuring. The letter should explain why it was necessary for the company to undertake the restructuring. Your explanation should refer to the ideas discussed in the section “Using Total Quality Management (TQM) and Activity-Based Management (ABM) to Reengineer Production and Delivery Systems” of this chapter.