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UPDATE 3-JCPenney to cut 900 jobs in Texas and Pittsburgh
April 5, 2012 / 3:42 PM / 6 years ago

UPDATE 3-JCPenney to cut 900 jobs in Texas and Pittsburgh

April 5 (Reuters) - J.C. Penney Co Inc said on Thursday that it will cut about 900 jobs, including roughly 600 at its headquarters, as it trims costs and tries to start running its 110-year-old business more like a nimble start-up.

The Plano, Texas-based retailer, which has already overhauled its pricing strategy under new chief executive Ron Johnson, said it plans to close a customer call center in Pittsburgh, affecting about 300 employees.

The roughly 600 workers being let go in Plano represent about 15 percent of the staff at the company’s main office.

“We are going to operate like a start-up,” said Johnson, a former Apple Inc and Target Corp executive. “Often in business, companies must streamline in order to leap forward.”

J.C. Penney currently has about 136,000 full- and part-time employees, down from about 159,000 in late January, when seasonal staff stayed on to help make the changes needed to roll out the new pricing strategy.

In February, Penney ended a longtime practice of marking up prices and then discounting them to entice shoppers to buy on sale. Now, it keeps prices low from the start and holds twice-monthly sales to clear out out-of-season merchandise.

Penney is shutting the call center as the number of calls the company is getting from shoppers has fallen more than 30 percent since the new pricing plan was implemented, it said.

The Pittsburgh call center will shut down on July 1, while centers in Columbus, Ohio, and Milwaukee will remain open.

Thursday’s announcement is part of a plan unveiled in January, when Penney said it aimed to cut annual expenses by $900 million by the end of 2013.

At that time, Chief Operating Officer Mike Kramer said Penney’s reporting structure was bloated and suggested the company could save $90 million a year with a leaner operation at its headquarters.

Penney shares were down 1.7 percent at $34.86 on Thursday afternoon on the New York Stock Exchange.

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