J.C. Penney Cutting 2,200 Jobs as Sales PlungeSapna Maheshwari
J.C. Penney Co. is cutting an additional 2,200 jobs to trim costs as Chief Executive Officer Ron Johnson’s revamp of the department-store chain causes sales to plunge.
The positions to be eliminated include back-office administrators in stores and district offices as well as store leadership positions, Joey Thomas, a spokesman, said in an e-mail yesterday. About 10 percent of J.C. Penney’s 1,100 stores cut their headcounts because of sales volume shifts, he said.
Johnson said last week that 19,000 J.C. Penney employees have lost their jobs in the past year as his turnaround struggles to gain traction. The retailer’s revenue fell 25 percent to $13 billion in the year ended Feb. 2, the lowest since at least 1987. Customers have been alienated by marketing missteps, a failed attempt to transition away from sales and coupons and Johnson’s plan to turn most stores into collections of boutiques.
“As with any reduction in force, we do our best to absorb those impacted into other positions if they choose to do so,” Thomas said. “Impacted team members were given 30 days notice, so their last day would not be effective until April 6. Those who are benefits eligible will receive a severance package and outplacement assistance,” he said.
J.C. Penney gained 2 percent to $15.11 at the close in New York. The shares have lost 23 percent this year, after a 44 percent plunge in 2012.
Johnson said on the company’s Feb. 27 earnings call that frequent rumors about job cuts are hard on the retailer’s teams.
“This idea that we’ve got massive headcounts reductions on the way is just really rumored, and we will tactically make changes, but this has been much more rumor than it is fact,” Johnson said on the call in response to a question about workforce reductions.
He mentioned the 19,000 job losses during testimony in New York state court in Manhattan last week as the company defends itself from a lawsuit by Macy’s Inc. over Martha Stewart-branded goods.
Former J.C. Penney CEO Allen Questrom said in a telephone interview March 6 that he was concerned about additional job cuts.
“Penney is an American institution, and people who work there will have their lives affected if they lose their jobs,” Questrom said. “That’s who I worry about.”
The retailer operates about 1,100 stores, according to a Feb. 27 statement. J.C. Penney employed 159,000 people as of January 2012, according to data compiled by Bloomberg.