Plano, TX—The required filings and statements that public companies must supply the Securities and Exchange Commission (SEC) are usually a sure cure for insomniacs. But the 10-K report that JCPenney filed on Wednesday has been fodder for those critics of CEO Ron Johnson and his transformation of the department store.
Besides trying to put a spin on its recent dismal fourth quarter earnings report—and trying to dampen rumors of Johnson’s and CFO Kenneth Hannah’s imminent departures (which Hannah vehemently denies)—stories of more job cuts have been rumored.
In the 10-K, however, JCPenney states that it has 116,000 full-time and part-time employees as of Feb. 2. Meanwhile, in the previous year’s annual report, the retailer said it had 159,000 full and part-time employees!
So that means JCPenney is operating with 43,000 fewer employees—a 27% decline?
Johnson had testified earlier this month at the Macy’s/Martha Stewart trial that since he became chief executive 19,000 jobs were eliminated.
According to James Covert at The New York Post, the company said “the year-end figure of 159,000 was ‘inflated by an unusually large number of seasonal hires.’”
The reported payroll of 116,000 workers in the SEC filing represents a headcount drop of 18,000, roughly in line with Johnson’s testimony.
The news is likely to further fuel rumors that the company’s employee pool has dipped below 100,000.
According to the filing, the company admitted to “a substantial amount of turnover of officers and line managers with specific knowledge relating to us, our operations and our industry that could be difficult to replace.”
The store’s reasoning?
“We now operate with significantly fewer individuals who have assumed additional duties and responsibilities and we could have additional workforce reductions in the future.
“In addition, our business has shifted towards a decentralized management structure that distributes significant control and decision-making powers among our senior management team and other key employees, some of whom are located in satellite offices.
“These workforce changes may negatively impact communication, morale, management cohesiveness and effective decision-making, which could have an adverse impact on our operating efficiency.”