Department store chain Macy's announced it will close 125 stores in "lower tier malls" and lay off 2,000 corporate workers over the next three years.

The move, which the company detailed Tuesday, comes one month after Macy's said it would close 29 stores despite reporting strong store sales during the holiday shopping season. The company will also close its Cincinnati headquarters and make its main base in New York City. The company didn't release a list of stores that will close, but they represent 20% of Macy's locations and a combined $1.4 billion in annual sales.

The company plans to release more details of its three-year plan – dubbed the Polaris strategy – during its annual meeting with investors Wednesday.

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Macy's CEO Jeff Gennette said in a statement that the store closings and reduction in staff will "bring teams closer together and reduce duplicative work."

"This will be a tough week for our team as we say goodbye to great colleagues and good friends," Gennette said. "The changes we are making are deep and impact every area of the business, but they are necessary."

Gennette said the moves will allow Macy's to better compete in the retail industry. The company is experimenting with stores that a smaller physical footprint, one of which is set to open in Dallas this week.

Many retailers are either closing stores because of decreasing sales or struggling to adjust to shoppers migrating to online purchasing. Women's clothing store DressBarn announced last May it would close all 650 of its stores. Payless ShoeSource closed its doors last year as well. Furniture store Pier 1 said last month it is closing up to 450 of its stores.

Macy's – which reported $25 billion in sales in 2018 – has locations in 43 states and employs about 130,000. The company has about 680 stores under the name Macy's or Bloomingdale's and another 190 stores named Bluemercury, Bloomingdale's The Outlet and Macy's Backstage.

Macy's plans to invest more in its online store and mobile app, which officials said account for more than $6 billion per year in sales. The San Francisco-based staff of Macys.com will be relocated to New York.

Macy's officials said they expect the move to save the company about $1.5 billion over the next three years and about $600 million in 2020 alone.