J.C. Penney cutting 1,000 jobs as it closes stores during bankruptcy

J.C. Penney plans to cut 1,000 of its roughly 85,000 jobs as it tries to fight its way out of bankruptcy protection. The jobs to be eliminated include corporate, field management and international positions, the company said Wednesday.

The Texas-based retailer said last month it had identified 154 stores for closure in the first phase of a restructuring to shrink its footprint. As part of its bankruptcy reorganization, J.C. Penney has said it plans to permanently close nearly a third of its 846 stores in the next two years. That would leave it with just over 600 locations.

Although the coronavirus pandemic has further dented J.C. Penney's sales, the store had been declining for years amid the growth in e-commerce, and is weighed down by $4 billion in debt. 

"J.C. Penney actually embraced e-commerce earlier than most other U.S. department store chains, but the company did not capitalize on this head start," Bob Hoyler, senior research analyst at Euromonitor International, told CBS MoneyWatch in May. "J.C. Penney has not been able to survive on its e-commerce sales alone during the pandemic, so the forced store closures represent months of revenue that will simply never be recouped."

In its most recent quarter J.C. Penney's sales fell nearly 8%, to $3.4 billion, from the year-ago period, while profits fell about two-thirds from a year ago, to $27 million. J.C. Penney missed two debt payments in April and May, which analysts saw as a harbinger to bankruptcy.

J.C. Penney filed for bankruptcy protection in May. The company has $500 million in cash and has commitments from lenders for another $900 million to help it get through its structuring, company officials said. 

Prior to the filing, J.C. Penney gave its top executives millions of dollars in bonus pay. CEO Jill Soltau received $4.5 million, while chief financial officer Bill Wafford, chief merchant officer Michelle Wlazlo and chief human resources officer Brynn Evanson each got $1 million. 

Other retailers have filed for bankruptcy recently, including J. Crew, Neiman Marcus, Brooks Brothers and Sur La Table. Retail experts expect a wave of bankruptcies in coming months.

On Tuesday, PVH Corp., the owner of brands including Calvin Klein, Tommy Hilfiger, Van Heusen and IZOD, announced 450 jobs cuts in North America and said it would close 162 of its stores.