Macy's (M) will lay off about 13% of its corporate staff as it aims to add more "automation" to their business models according to a report from The Wall Street Journal. The retailer will also close five stores in a bid to trim costs.

Yahoo Finance's Madison Mills and Josh Lipton weigh in on this announcement and discuss the impact of AI on corporate business models.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Eyek Ntekim

Video Transcript

- And now, some breaking news here-- Macy's reportedly planning to lay off about 13% of its corporate staff and close five stores. The retailer looking to add more automation to its supply chain and outsourcing some roles. This all according to the "Wall Street Journal."

Shares of Macy's right now in the after hours marginally lower, down about half a percent. So per the "Journal," Madison, it sounds like we're talking about, in total here, 2,350 positions. That would be about 3.5% of the total workforce.

Where's the company investing? It sounds like areas that impact consumers. So think about visual display managers, upgrading digital functions. And all this coming, we know, as Macy's President, Tony Smith, going to be taking over as CEO next month.

- Yeah, it's interesting, because when it comes to earnings, Macy's has been outshining some competitors when we think about names like Nordstrom, Kohl's. But these layoffs could be a move to continue some of that upward movement, cutting about, again, 13% of its corporate staff. They did mention in this "WSJ" exclusive that Macy's is planning to add more automation to its supply chain.

I want to double click on that, because it seems as if we're hearing more of these executives talk about AI as sort of a talking point, an excuse, perhaps, when they announce these layoffs. And they do say also that these layoffs are going to occur on January 26, this becoming the latest company name to announce job cuts this year, Josh.

- Yeah, remember, this is all coming, of course, as Macy's is dealing with activists who reportedly did make this nearly $6 million offer to buy Macy's, take it private-- as it is dealing with this tougher competition. So a story we'll keep watching.