300 layoffs are part of strategic efforts by CEO Ellison to become profitable again.
JCPenney has announced that it is reducing its staff at their Plano, Texas headquarters by 300 employees as part of an ongoing strategy to cut costs and become profitable again, according to the Dallas Morning News. CEO Marvin Ellison, who took the reins in August, has been focused on identifying ways to save money and boost revenue for the company.
Fortune reported that the retailer saw improved sales this year after its “disastrous attempt” to become a trendier retailer in 2012 and 2013. For Q2, JCPenney reported that same-store sales rose 4.1 percent, easily outperforming rivals like Macy’s (1.25 percent) and Kohl’s (-0.39 percent).
“As J.C. Penney works to achieve its financial growth targets, it is essential that our operations align with the strategic priorities of the company,” said Penney spokeswoman Daphne Avila, in a prepared statement, the Dallas Morning News reported. “Over the last several months, the company has been evaluating its home office structure to identify opportunities for greater simplification and higher productivity.”
Some of the cuts are the result of new systems installed this year from information technology vendor Oracle. Avila explained that with new processes, “it is imperative that we maintain a thoughtful approach to managing expenses while effectively supporting the needs of the business.”
In 2014, the retailer outlined a three-year plan to grow sales by $2 billion by the end of 2017 and generate earnings before taxes and other items of $1.2 billion. And under Ellison’s guidance, the company is also focused on improving omnichannel capabilities; updating stores and in-store salons; and highlighting proprietary offerings like the Sephora beauty chain and the Michael Strahan menswear collection.
This spring, JCPenney also announced several important staffing changes in the C-Suite, foreshadowing bigger things for the future. Other recent changes at the retailer have been geared towards restructuring and strengthening the company, according to Integrated Solutions for Retailers. They reintroduced the print catalogue this year, and J.C. Penney is hoping that they can continue the positive growth they have seen in the recent months, as they reported stronger-than-expected holiday sales. It also follows plans to restructure, by closing 33 stores and cutting 2,250 jobs, in its efforts to better meet its customer base. Bringing back aspects of what made the chain a shopper-favorite may be just what the brand needs to complete the comeback in 2015.
JCPenney is not the first retailer to make deep job cuts in 2015. Walmart, Neiman Marcus, and Target have all made or announced eliminations as well.
