JC Penney announces management shakeup and cuts 360 jobs

Key Points
  • J.C. Penney announces 130 job cuts at its corporate headquarters in Plano, Texas, and 230 cuts from within stores.
  • The company also is shaking up its leadership team.
  • Penney says the cuts will save the company as much as $25 million annually.
JC Penney announces management shakeup and cuts 360 jobs in hopes of saving $25 million a year

J.C. Penney confirmed Friday it is eliminating 360 jobs, including 130 at corporate headquarters, saying the cuts will save the retailer up to $25 million a year.

The company also is shaking up its leadership team.

The announcement confirmed a report Thursday evening that the company was reducing staff at the Plano, Texas, offices.

"Just as we conduct a review of our stores and supply chain operations each year, we continually evaluate the productivity of our Home Office structure to ensure that it efficiently aligns with the business," the company said in an email to CNBC. "Certain positions have been eliminated as a result of this annual assessment."

The company, which reported disappointing fourth-quarter earnings on Friday, said it will eliminate 230 positions from stores.

Other workers will be reallocated to more customer-facing positions, the company explained, to simplify operations and oversee omnichannel initiatives. Omnichannel is a multichannel approach to shopping that aims to provide customers with a seamless experience, whether they're buying online or in stores.

In the home department, the company will assign people to lead the appliances, window coverings, furniture and mattress categories. These are just a few examples of how resources are shifting, Penney said.

The company said the annual cost savings generated from the staff cuts will be about $20 million to $25 million.

J.C. Penney's stock fell more than 12 percent Friday morning following the earnings report.

"As the Company continues to make progress on its strategic framework and implement new processes and organizational efficiencies, it is imperative that we maintain a thoughtful approach to managing expenses, while effectively supporting the needs of the business," CEO Marvin Ellison said in a statement.

Regarding the management changes, the company said Mike Amend, executive vice president of Penney's omnichannel business, is leaving. It said Therace Risch will assume the omnichannel responsibilities as chief information and chief digital officer.

In addition, Joe McFarland will become Penney's chief customer officer and will lead merchandising and store operations. McFarland and Risch will report to Ellison.

Late last year, Penney announced it would no longer have a chief merchandising officer, once one of the most powerful jobs in retail.