The department store chain saw a 5.2% drop in sales in November and December as shoppers switch online.
Macy's has announced it is cutting up to 4,800 jobs and closing 40 stores after a miserable holiday season.
America's largest department store chain, which also operates Bloomingdale's, blamed the move on a shift to online shopping after a 5.2% drop in sales in November and December.
Some 2,110 of the job cuts will come from reducing staffing levels at stores, eliminating duplications in back-office operations and consolidating regional store groups.
Unseasonably warm weather in some parts of the US also affected sales, with shoppers staying away from cold-weather goods.
The company, which has offices in Cincinnati and New York, said Macy's was forced to step up discounts on cold-weather items to clear out mounds of merchandise.
Macy's has been working to expand its online services, as well as branching out into discount stores under the Macy's Backstage label.
Terry Lundgren, chairman and chief executive, said in a statement: "In some cases, there will be short-term pain as we tighten our belt and realign our resources.
"But our eye is on a long-term vision of Macy's Inc as a dynamic retailer that serves existing customers and acquires new ones through innovative approaches."
Mr Lundgren added that the store's website saw orders up 25% from the previous year.
Macy's has 770 stores in the US and employs around 163,000 workers. The company has seen its share price slump more than 44% in the last 12 months.