Cincinnati-based Macy's, which is struggling from what it calls a challenging economic environment, said today it is closing its Seattle-based...

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Cincinnati-based Macy’s, which is struggling from what it calls a challenging economic environment, said today it is closing its Seattle-based Northwest management office as part of a massive shake-up of its retail divisions.

About 750 employees in Seattle will lose their jobs as the Northwest office is folded into Macy’s San Francisco-based West division.

Macy’s also is consolidating its Minneapolis-based North organization into its New York-based East division, and its St. Louis-based Midwest organization into its Atlanta-based South division. About 950 jobs in Minneapolis and 850 jobs in St. Louis will be eliminated.

Laid-off employees will receive undisclosed severance benefits and help finding other jobs, Macy’s said.

The reorganization, which is expected to be completed in the second quarter, will allow Macy’s to reduce its overhead costs by about $60 million this year and $100 million in 2009, the company said. No store closures are planned.

Citing an “uncertain macroeconomic environment,” Macy’s said sales at its stores open at least a year fell 7.1 percent in January, worse than what Wall Street had been expecting.

Jeffrey Gennette, 46, currently chairman and chief executive of the Northwest office, will move to San Francisco and take over as chairman and chief executive of the West division, replacing Robert Mettler, 67, who has postponed his July retirement to oversee special projects. Gennette moved to Seattle in February 2006 after serving two years as executive vice president at Macy’s Central office in Atlanta.

Robert Harrison, currently president and chief operating officer of Macy’s Northwest office, will remain in Seattle to see it through the transition. Ultimately, he’ll be reassigned to another position within the company, Macy’s said.

The new Macy’s West division will cover 257 stores in 13 Western states and Guam. All told, they produced 2007 sales of about $7 billion.

The company also announced a new localization initiative called “My Macy’s,” aimed at making sure core customers find the merchandise they want in the sizes they need.

Amy Martinez: 206-464-2923 or