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Thursday, April 5, 2012
J.C. Penney Co. announces layoffs at Plano headquarters
The company has also announced plans to close a customer call center in Pittsburgh.
Plano-based J.C. Penney Co. laid off 600 employees at its corporate headquarters Thursday morning, the latest in a move to transform the company under the tutelage of its new chief executive officer.
The workers account for more than 10 percent of the staff at the Legacy Drive headquarters in western Plano. The layoffs were not specifically mentioned in a press release issued by CEO Ron Johnson on Thursday morning, but were hinted at in January when investors were told the company intended to cut costs by $900 million by the end of 2013, including $200 million from its headquarters.
"We are also transitioning from a culture based on management to one based on leadership," Johnson said in Thursday's release. "We are going to operate like a start-up. ... Often in business, companies must streamline in order to leap forward. In our case, this has involved some very difficult decisions that have had an impact on many of our associates, but these changes are essential to help us achieve our long-term goals and, ultimately, grow our associate base as we grow our business."
The company has also announced plans to close a customer call center in Pittsburgh, Pennsylvania later this year, which will eliminate another 300 jobs.
Johnson, who received $53.3 million in total compensation last year according to the Wall Street Journal, was hired as CEO in November after having worked as an executive at Apple. He was tasked with turning around a company that has seen its stock drop nearly 60 percent in the last five years.
One of the first moves Johnson made was changing the way the company sold its products. The company has a new marketing campaign touting its low prices, while eliminating sales and other promotions.
"Simplicity is one of the guiding principles of our transformation," Johnson said. "In years past, we've motivated our customers with endless promotions and discounts, and that required a lot of process-oriented work. At the new J.C. Penney, we're beginning to inspire customers with great merchandise, an exciting shopping environment and 'Fair and Square' pricing. Just 60 days into our transformation, we can see -- more clearly than we even imagined -- that this is a simpler way to do business and a better way to compete."
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stefmarisa, anonymous:
Kind of think that this new JCP approach backfired.... Everyone I talk to doesn't shop there anymore...Coincidence? Were they really in need of this big change?
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usethisone2012, anonymous:
Ironic that the same corporate office in Plano held a $3 million party for the February 1st kickoff for the "Fair and Square" launch for their employees and today they fired 600 corporate associates. I'll bet $3,000,000 could have paid a lot of salaries! And I'll bet a LOT of people are pissed off about that huge waste of money instead of taking the opportunity to save some jobs. Way to go corporate higher up executives -- another brilliant (and caring) decision.
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tmack364, anonymous:
Simply outrageous! How can such a person sleep each night. 600-900 people lost their livelihood, while he pockets $53mil dollars in compensation for approximately 3 months of worth of work!
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jn1229, anonymous:
This is the "New" JC Penny company, one that will illustrate clearly what doesn't work when a CEO with NO EXPERIENCE comes in with wild ideas to alter a corporate culture only to find that his strategy is flawed...seriously flawed. Do not support this strategy...SHOP ELSEWHERE!
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lisaltx, anonymous:
I just hope my stylist that works there lets me know where she is going before they shut down.
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maribayola, anonymous:
I wonder how much they are paying Ellen DeGeneres for being their spokesperson.
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vickie, anonymous:
There is nothing "new" about JC Penney, except for their advertising/marketing campaign. I walked through one of their stores last week. It was all the same old junk they've always carried, in the same old junky store.
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Jason Rice, verified:
Not to belabor the obvious, but the goal of this "new no-sales-no-promo-no-pomp-and-circumstance" approach was to streamline the entire machine. "Streamline" doesn't always mean "do more with what we have," sometimes it means "do what we do now with less."
So if the idea was to reduce process, then gee, without need for duplicate TPS reports, the TPS report duplicator isn't needed either.
Hate to hear of lost jobs, but that's pretty much what he said he'd do when hired. He didn't say "I was hired to expand with what we have" so it sounds pretty consistent to my simplistic non-MBA mind.
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jn1229, anonymous:
Well Jason, do you really think that this guy knows what he is doing? I can honestly say that he has no idea what he is doing and the results of his recent JCP new identity campaign clearly illustrates this failure. Stick a fork in it's a$$...JCP is done. Shop elsewhere...I am!
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krazykinu, anonymous:
I've worked for penneys for at least a decade and I'm loving this new revamp. I'm seeing a positive change happening, and it's even making my job easier to help and assist the customer. Everyone who thinks this idea is dumb doesn't understand what's really going on. I almost wish the public also got to see the video that all associates had to watch to understand the change because maybe the ignorance would subside. There has yet to be any failure that I can see. My store is continually doing great with sales and we're even getting some high end brands that are finally contracting with us because we don't have all the annoying messy coupons. The new way of clearancing stuff is organized for once, everyones getting the same great deals morning, noon, and night, the cash registers are clean from cramming useless coupons everywhere, and there is rarely anymore pricing confusions. The ads we receive in the mail are filled with simplistic, easy to understand, beautiful advertisement filled with heart-warming stories almost everyone can try to relate with. He's upholding the Golden Rule (which was what JCPenney's was founded on). It is sad that people lost their jobs, but cutting back isn't always a bad thing. This guy knows what he's doing, having been the vice president of Apples retail side of things and senior merchandising executive for Target. How can all of you say he has no experience? He's the most experienced I've ever read about. Stop circle-jerking one another and open your eyes. JCP now has integrity.
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BrimstoneBroker, anonymous:
A brilliant move snagging Johnson & Kramer; by far one of the smartest moves they've made in decades. My grandfather helped bring JC Penney to Texas, and although he passed away decades ago it's safe to say he would be pleased with their current direction. He was big on efforts that "clarify and simplify" while maintaining the prime directive; The Golden Rule. Their new advertising is incredibly vibrant and uncluttered. Best of the best. I think Mr. Penney would be pleased as well.
Layoffs are always received with sadness and frustration, but tough decision are necessary when a company's bottom line is suffering.
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What do you think?