Neiman Marcus Group to lay off around 500 employees amid economic uncertainty

Neiman Marcus Group has announced plans to lay off around 5% of its workforce, equivalent to around 500 employees. The company has said that the layoffs are part of its plan to reduce costs amid a tough economic outlook.

Neiman Marcus Group to lay off 5% of its workforce

Neiman Marcus Group has become one of the many companies in the United States trimming their workforce because of economic uncertainty. The layoffs have been seen across nearly all sectors, including Wall Street banks, tech giants, and online retailing companies. The layoffs come amid speculations of an economic downturn.

Neiman Marcus Group has said that among the people that will be leaving the company is the Chief Product & Technology Officer, Bob Kupbens. The company has also said that the company’s President, Ryan Ross, will be in charge of customer insights.

The company will also assign the president of the luxury department store, Bergdorf Goodman, group-level leadership for the NMG Product &Technology organization. According to its website, Neiman Marcus Group is one of the largest luxury brands in the United States, and it has an employee base of over 10,000.

In 2022, Farfetch Ltd, an online retailing company dealing in luxury fashion products, announced plans to make an up to $200 million investment in Neiman Marcus Group. The investment came when the company gained a solid presence in the United States amid a deal to grow its online operations in its high-end department store.

Inflation concerns could trigger more layoffs

There are concerns that more layoffs could be on the way because of the recent US inflation data released earlier this week. The data shows that inflation was at 6.4% in January, slightly dropping from the 6.5% reported in December. However, the month-to-month inflation was up by 0.5% in January.

The consumer price index report also noted that the core inflation, which includes the price of all items in the index except food and energy, increased to 0.4%. Core inflation excludes food and energy prices as they are prone to volatility.

Before the inflation data was released, the chair of the US Federal Reserve, Jerome Powell, had said that the disinflation process had commenced. However, Powell warned that high inflation levels could persist in 2023.

Powell also noted concerns about price increases in the service sector. He noted that the sector played an instrumental role in where inflation was headed during the year.

The CPI report released this week also shows that the cost of services, excluding energy services, increased by 0.5% for the third consecutive month. Moreover, the cost of services, excluding rent prices, remained the same and only gained by 0.6% for the second consecutive month. The two metrics indicate that inflation is not determined by the volatile prices of rent and energy, as these sectors tend to lag.