Macy’s announced on Tuesday that it will close 125 stores and axe 2,000 jobs, becoming the latest shopping giant to shutter shops amid a radical reordering of the retail landscape.

The department store chain plans to exit weaker shopping malls and focus on opening smaller-format stores in strip malls.

“We are taking the organization through significant structural change to lower costs, bring teams closer together and reduce duplicative work,” Jeff Gennette, Macy’s chief executive, said. “The changes we are making are deep and impact every area of the business, but they are necessary. I know we will come out of this transition stronger, more agile and better fit to compete in today’s retail environment.”

About 2,000 jobs will be lost at the company’s headquarters in Cincinnati and its tech offices in San Francisco. The company estimates the cuts will save it $1.5bn by 2022.

Macy’s is the latest mall anchor to announce sweeping cuts. Sears and Toys R Us are bankrupt and others, including JC Penney, have been closing stores. Retailers announced more than 9,300 stores in 2019, a new record, according to an analysis by Business Insider.

Loss of sales to online retailers, particularly Amazon, has sped up the rate of closure. Last week Amazon announced it had had its best ever Christmas, making a profit of $3.3bn in the last three months of 2019.

Macy’s executives will meet with investors in New York on Wednesday to outline their future plans.