Submitted by Katie Hellmuth on | 0 Comments
Every morning during breakfast, before I sit down to my computer, I read my paper - which is currently The Wall Street Journal. In print. At lunch, I step away from the computer, and finish some articles that caught my eye during breakfast.
This morning, my current corporate soap opera had a headline: "Penney Wounded by Deep Staff Cuts". I'm hooked on Penney news. First the plummet in sales after the new CEO decided that discounts and coupons were confusing and a waste of time (he missed this 2001 report about how wrong that was). Then the failed-to-catch-on mini stores within a store - with even more Martha Stewart in yet another big box store (come on Martha, play a little hard to get...plus, her involvement triggered another scandal with Macy's...it's like a scandal within a scandal!). Then the CEO Ron Johnson, a darling from Apple, was let go (or resigned, that's yet to officially come out), to be replaced by the former CEO who he replaced.
And now comes the part when former empolyees spill the beans. So this morning, former employees are dishing on how they were fired - in droves. By the hundreds. In auditoriums.
Johnson, to trim the bottom line, decided that employees who designed one of the the company's most profitable and stable in-house lines, St. John's Bay, which brought in a billion dollars a year on its own, were watching too many videos online.
During the firing spree, which happened across departments of JC Penney, executives were given the news that several of their team members needed to be fired in order to save money on the bottom line. The executives, according to the article, wanted to fire their staff face to face. Johnson and his HR cronies (some whom he brought from Apple) decided that face to face was too costly, and had his people give the executives a script to follow over the phone, or just in big rooms. As reported: "Workers were brought to the auditorium to be fired in groups."
When the $%it hit the fan, meaning, when sales sunk royally, employee morale was low, and nothing was working, Jonhson wanted to resign (according to the article). But JC Penney had no one to replace him with, so he waited two weeks, in which time, the former CEO was approached and jumped at the chance to lead his people again.
What does appear in these articles time after time, is mention of JC Penney's largest shareholder, hedge-fund manager William Ackman. He seems to be the pusher for a greater bottom line, and the pusher for grand cuts like this to employees. Not sure why he'd be OK with a 180degree turn on the customer base, effectively starting entirely over, alienating credit card holders who didn't mind paying fat interest rates each month on their charge cards.
But he did. As did a lot of other men at this corporation that sells to women. It's really quite dumbfounding. No wonder they thought the coupons were confusing. Obviously they don't watch Extreme Couponing on TLC which shows the high women get from a deal.
Oh wait, here's the kicker. I almost forgot. JC Penney is bringing back coupons and sales. So they need more signs in the stores to announce a sale and direct shoppers to sale racks. They used to do so much of this type of printing, that Penney's had their own printing in-house which kept costs down for all of their ongoing, on-demand printing needs. But Ron Johnson fired those guys too. Maybe he auctioned off the printing equipment?
