J.C. Penney has temporarily furloughed most of 85,000 employees, including store hourly workers and many corporate staff members in Plano.
Beginning Sunday, a significant portion of employees at the Plano headquarters, Salt Lake City accounting offices and Soho design offices will be furloughed, Penney said Tuesday.
Store salaried employees are also part of the temporary cuts. Penney said it would continue to pay health benefits for furloughed full-time employees.
“These are difficult days all across the country and the globe. At J.C. Penney, we are making tough, prudent decisions to protect both the safety of our associates and the future of our company,” chief executive Jill Soltau said in a statement.
“We remain optimistic about J.C. Penney’s ability to weather this pandemic,” Soltau said. “We also believe these short-term solutions will have a long-term benefit for our associates, customers and key stakeholders as we look forward to the day that we reopen our doors.”
Penney closed its stores and business offices on March 19 and had originally planned to reopen Thursday of this week.
Warehouse and logistics employees who support stores are also included in the furlough. The employees who are staying on are in the online part of the business.
Macy’s, Kohl’s, Neiman Marcus and Gap made similar announcements Monday as department stores and other specialty stores are forced to stay closed during the coronavirus pandemic.
Penney said it has no plans to reopen stores until it’s safe to do so. It anticipates that the reopenings will be gradual, as local and state governments lift shelter-in-place restrictions.
Most retailers have taken money from their revolving credit facilities to shore up cash available. On March 16 and 19, Penney borrowed $800 million and $450 million, respectively, from its line of credit as “a precautionary measure," the company said in its recent annual filing. It has $3.72 billion in long-term debt.
To cut costs and shore up cash, Penney said, it has also deferred capital spending, paused hiring, reduced receipts of goods, extended terms for payment of goods and services, and suspended merit raises.
Twitter: @MariaHalkias
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