Penney lays off 2,200 employees

Posted Friday, Mar. 08, 2013  comments  Print Reprints
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J.C. Penney confirmed Friday that it is eliminating an additional 2,200 jobs as the struggling department store chain slashes costs after a year of plunging sales and mounting losses.

According to Joey Thomas, a company spokesman, those being axed work in back-office administration in stores and district offices. He noted that the cuts translate to an average elimination of two positions per store.

The cuts come after Penney lost $4.3 billion in revenue over the past year as a strategy launched in early 2012 by CEO Ron Johnson to scale back sales in favor of everyday prices alienated many shoppers. The pricing strategy is a key element of Johnson's bigger plan to reinvent Penney's business, including shops filled with hip new brands to replace racks of clothing.

Penney reported last month that its quarterly loss widened to $552 million, or $2.51 per share. Revenue slid by a quarter to $12.98 billion.

Results for the full year were even more staggering. Penney lost $985 million, or $4.49 per share, for the fiscal year, compared with a loss of $152 million, or 70 cents per share, a year earlier. Revenue dropped 25 percent to $12.98 billion from $17.26 billion.

When Johnson joined the retailer, Penney employed 134,000. That means the company has cut about 16 percent of its workforce since then. The company operates 1,100 stores.

Thomas said affected workers were given 30 days notice. Those who are eligible for benefits will receive a severance package and outplacement assistance.

Penney's shares gained 29 cents Friday, or nearly 2 percent, to $15.11. In the days after Johnson announced his vision for a new Penney in late January 2012, investors drove shares up 24 percent to $43, but the stock has lost 65 percent of its value since then.

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