JCPenney is shuttering 33 stores and everything must go — including the employees.
The struggling department-store chain said 2,000 workers are being fired as a result of the closings, which are slated to be completed by early May.
Penney, which operates about 1,100 stores and reported 110,000 employees in November, said the downsizing will cut annual costs by $65 million.
The announcement, made after the market closed on Wednesday, got jeers rather than cheers on Wall Street, as Penney shares fell 1.4 percent in after-hours trading to $6.91.
“This does nothing to soothe the concerns about the holidays,” said one investor, referring to Penney’s vague press release last week saying it was “pleased” with year-end sales.
“If the holidays went well, you don’t need to close any stores, and if they didn’t go well, you need to close 300 stores, not 33,” the investor added.
What’s more, hourly wages of affected workers, about 3,000, will be cut significantly, in many cases near minimum-wage levels, with no prospects of a raise in the future, according to some insiders.
“These people are going to end up making less than they were while being forced to work harder,” according to one person close to the company.
Separately, Penney confirmed it’s bringing back sales commissions that had been banned by ex-CEO Ron Johnson, who believed pushy salespeople turned off shoppers.
Employees selling window treatments and fine jewelry will be put on commission next month, while furniture salespeople will follow in March, JCPenney spokeswoman Kristin Hays said. There currently are no plans to revive commissions in other departments, she said.