Rumors that struggling retailer J.C. Penney (NYSE:JCP) will be cutting costs by cutting staff at its home office in Plano, Texas, began surfacing earlier this month. Since then, the layoffs have become known to employees as the “St. Valentine’s Day Massacre,” referencing a prohibition-era gangster killing spree of the same name.
While originally slated to occur the same week as Valentine’s Day, the company’s pink-slip massacre has come a week later. And, as the New York Post reported Friday, it may be bloodier than expected. So far, CEO Ron Johnson decided to cut 300 workers at the retailer’s headquarters, representing about 10 percent of its workforce at that office.
The chief executive turned to layoffs to offset the company’s increasingly terrible sales, which were the result of a botched turn-around plan. He envisioned a company that could offer everyday low prices and boost its offerings with a wide range of small boutiques from designers like Levi’s or Sephora. But his attempt to revitalize the chain and transform the business, from pricing to customer experience, has apparently failed, and it looks like it will never happen.
His changes to the company’s pricing structure – which eliminated coupons and massive sales in favor of broadly lower prices — drove customers away instead of drawing them in. Sales dropped 23 percent since he cut prices last February. In its most-recent quarter, the company reported a larger-than-expected loss of $123 million, and it has shed nearly $5 billion in market capitalization since February 1, 2012. One year has passed since the new pricing structure was implemented, and J.C. Penney’s future looks grimmer than ever…