Report: JCPenney Slashed Workers’ Hours, Took Other Drastic Measures To Cut Costs

Image courtesy of Nicholas Eckhart

According to a new report, JCPenney had to work fast to cut costs recently after sales were unexpectedly sluggish last month. Some of the drastic measures the department store took included telling managers to cut workers’ hours, freeze overtime, and ban store markdowns.

These emergency moves came as a surprise to JCPenney employees, the New York Post reports, citing an internal company memo addressing an “expense challenge” the company was facing at the end of its first fiscal quarter.

“We have an expense challenge for the month of April and are asking all stores to do their fair share by closely monitoring all expenses,” the memo said.

Both full- and part-time employees had their hours slashed. If an employee worked 25 hours a week before the cuts, their hours were reduced to 10 or 15 hours.

All told, the cuts saved JCPenney about 800 hours over two weeks, or about $8,000 per store.

“Employees expect reduced hours in the slow months of January and February but not in April,” one employee told the Post. “When the quarterly figures are released, they do not represent the financial struggles and low morale of the thousands of associates company-wide.”

The temporary cuts included tightening the use of corporate cards, as well as banning store markdowns. One employee said that anyone walking into a JCPenney store during those two weeks probably saw a messy wasteland of clothing, as the worker said there weren’t enough employees to keep things tidy.

JCPenney is still struggling to recover from the reign of Ron “The Sale Killer” Johnson. New CEO Marvin Ellison has been on the job since August and has seen some success: JCPenney did pretty well in the holiday season compared to its competition, with a 4.1% uptick in same-store sales.

Despite that, employees are feeling a bit unsettled after the recent cuts, with the employee who spoke to the Post wondering, “Are we going to have to worry at the end of each quarter?”

JCPenney takes emergency measures to protect bottom line [New York Post]