J. C. Penney Company Inc. will furlough scores of workers as the novel coronavirus continues to take a toll on its already-struggling business.
The retailer today announced plans to temporarily release the majority of its hourly store associates, starting April 2, as its outposts across the country remain closed due to updated federal social-distancing guidelines. Beginning April 5, it will also furlough a “significant portion” of its corporate workforce at its Plano, Texas, headquarters, as well as at offices in Salt Lake City and New York, in addition to its salaried store associates.
“These are difficult days all across the country and the globe,” CEO Jill Soltau said in a statement. “We are making tough, prudent decisions to protect both the safety of our associates and the future of our company.”
An unspecified number of JCPenney associates in its supply chain and logistics centers were already temporarily let go on March 20. The company said that it expects furloughs could persist since the pandemic has led to more than 175,000 confirmed COVID-19 cases in the United States.
All furloughed workers will continue to receive their health benefits. The retailer also shared that it would cover all employee-paid premiums and encouraged impacted associates to apply for state unemployment benefits, which have recently been increased with the passage of the $2 trillion emergency stimulus package.
Beyond the job losses, JCPenney has taken actions to maintain its financial flexibility, including deferring capital spend and tapping funds available under its revolving credit facility, as well as cutting expenditures and pausing hiring efforts. The company added that it has suspended merit bonuses for the year and is “evaluating other financial options.”
In the meantime, e-commerce distribution centers and international operations continue to process orders, while customer care services are available to shoppers.
“We remain optimistic about JCPenney’s ability to weather this pandemic,” Soltau added. “We also believe these short-term solutions will have a long-term benefit for our associates, customers and key stakeholders as we look forward to the day that we reopen our doors.”
For several quarters, the department store chain has struggled with declining sales, numerous leadership changes and increased digital competition. These and other issues have spooked investors and pushed its stock below $1 — putting it at risk of being delisted from the New York Stock Exchange.
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