The cuts, which amount to about 4 percent of Macy's 180,000-person workforce, come as some retail chains have filed for bankruptcy and others have announced layoffs.

Employees at Macy's West learned of the layoffs Monday morning when signs were posted at the entrance to their offices on Union Square directing them to assemble in the basement ballroom of the nearby Grand Hyatt Hotel.

There, according to employees who were present but did not want to be named, senior Macy's executive Janet Grove spent about 20 minutes outlining a reorganization plan to a packed but quiet room.

Spokesman Jim Sluzewski said all Macy's West employees will work through April 30 and some even longer. After the changes are complete, the San Francisco office will have about 125 employees left, he said.

Jeffrey Gennette, current chief executive of Macy's West, will move to New York to become chief merchandising officer for the chain as part of a reorganization designed to replace its big divisions with 69 smaller regional districts.

Other divisions closing

Division offices in Atlanta and Miami also are being closed as Macy's shifts some work to the new regional districts and the rest to its remaining corporate centers in New York and Cincinnati.

Macy's said it is creating about two dozen new merchandising positions for each district of 10 to 12 stores, and laid-off employees would be encouraged to apply for the new jobs.

In January, Macy's said it would close 11 stores, leaving it with 848 locations, including 40 Bloomingdale's. No store closings were announced Monday, but Macy's said it is cutting an average of five or six jobs at each of its many stores, distribution centers and local offices for a total of 5,100 positions.

At the end of all the firing and hiring, Macy's expects to have cut about 7,000 jobs nationwide. Macy's also said it is cutting dividends to shareholders, canceling merit pay increases for executives and reducing its matches to 401(k) plans in 2009.

Sales forecast to drop

In a statement announcing the layoffs, Macy's chief executive Terry Lundgren said the company took these and other moves in anticipation that same-store sales will sink 6 to 8 percent this year.

"Reducing our workforce is an unfortunate outcome of the current economic environment," Lundgren said, promising that the chain will be "sensitive to all affected employees (and) work diligently to find other positions for as many of them as possible."

Macy's said the reorganization will cost it about $400 million to put into effect and will save $250 million this year and $400 million a year starting in 2010.

Helen Bulwik, of the retail consulting firm New Market Solutions in Oakland, said the reorganization is a smart move that will centralize functions like strategic planning, finance, technology and human resources while pushing more merchandising power down to the managers who will run its new clusters of 10 to 12 stores.

'Very, very smart move'

"This is a very, very smart move on their part," Bulwik said. "They are taking expenses out while becoming more focused on the customers in each specific market area."

Ken Perkins, with the Massachusetts market research firm Retail Metrics, said the entire industry is suffering as consumers reduce spending, and many chains already have cut jobs and closed stores to weather the downturn.

"Retailers are reacting as best they can," Perkins said.

Financial analyst Betty Chen with Wedbush Morgan Securities said Macy's expectations of 6 to 8 percent sales same-store sales declines come on top of 2008 sales that were already starting to weaken.

"As we go into 2009, many retailers are expecting a very challenging year," she said.

E-mail Tom Abate at tabate@sfchronicle.com.

This article appeared on page A - 1 of the San Francisco Chronicle