JCPenney cuts 1K jobs, closing stores
Company trying to restructure operation
J.C. Penney is cutting 1,000 jobs as it attempts to identify a business plan enabling it to avoid a sale that could lead to its liquidation.
The department store chain said Wednesday that “corporate, field management and international positions” would be affected by the latest round of cuts. Those reductions come in addition to plans to permanently close 242 stores, including 152 that have already been identified.
The company also said in a court filing that it received an extension from certain lenders on Tuesday’s deadline to secure their approval for a business plan to restructure its operations in Chapter 11 bankruptcy.
The deadline was extended until
July 31, giving the retailer more time to negotiate a potential escape route that is likely to involve significant debt cuts. Absent such a plan, J.C. Penney will be forced to consider a sale of the company, which its attorneys have acknowledged could lead to the liquidation of the entire chain.
The bankruptcy judge on the case,
David Jones, has said he wants to avoid that outcome, but cannot rule it out. With 846 stores and 85,000 employees at the time of its bankruptcy filing in May, J.C. Penney hopes to emerge from bankruptcy with about 600 stores.
Regarding the fresh round of layoffs, CEO Jill Soltau said in a statement: “Each of these associates has made valuable contributions to the legacy of JCPenney, and we are truly grateful for their service. These decisions are always extremely difficult, and I would like to thank these associates for their hard work and dedication. We are committed to supporting them during this period of transition.”
Before the COVID-19 pandemic, J.C. Penney was already dealing with declining sales amid digital competition, sizable debt and falling foot traffic to shopping malls. The pandemic forced the retailer to temporarily close all of its locations.