J.C. Penney to Lay Off 900 in Corporate Reorganization

       

       

PLANO, Texas–J.C. Penney said its reorganization involves the lay off of 900 employees from its headquarters here and through the closing of a call center in Pittsburgh.

According to a company statement, the retailer’s “new approach to pricing, promotion, merchandising and the customer experience requires a more competitive operational structure, with fewer layers of management, wider spans of control and greater accountability throughout the organization.”

In all, a J.C. Penney spokesman said, the layoffs represent 1 percent of J.C. Penney’s work force nationwide. The Pittsburgh call center will close on July 1.

In the statement, Ron Johnson, J.C. Penney’s CEO, said, “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 hand an impact on our 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 layoffs, according to the statement, are part of the plan, announced on Jan. 26, to reduce J.C. Penney’s annual expenses by $900 million by the end of 2013. This includes $200 million in savings from the corporate headquarters, $400 million in savings from store operations and $300 million in advertising-expense savings. The goal is to achieve an expense run rate of 27 percent by the end of the company’s total transformation in 2015.