Hammered by stiffening competition from retail giants Walmart and Amazon, department store chain J.C. Penney is making moves to stay afloat by targeting its workers’ hours, wages and benefits.
The company plans to eliminate most full-time jobs, converting them to part-time positions, the New York Post reported Feb. 27. Formerly full-time employees will be cut to 25 hours a week from 35. “On top of giving it more staffing flexibility,” the Post says, “the move to a part-time sales staff allows JC Penney to cut costs, since part-timers don’t qualify for health benefits.”
The company says it also plans to hire additional part-timers. This means they can give them a few hours on busy evenings and parts of the weekend. To make room for them, the company laid off 360 workers March 2.
“I’ve been working part time, getting up to 25 hours on a good week, for the three years that I’ve been here,” one worker employed at the J.C. Penney store in Manhattan Mall in New York, who asked that her name not be used, told me. “All the workers here are part time, except for managers and supervisors. When this store opened, a lot of people worked here, but that’s been cut back a lot.”
These moves by J.C. Penney come amid sharpening competition in retail as brick and mortar stores are battered by expanding sales online. The weaker store chains — like Macy’s, Kmart, Target, Kohl’s, Payless Shoes and others — have been forced to retrench and malls are closing. And they all face declining profits as they try to compete with the industry behemoths Walmart and Amazon, who, in turn, are at each other’s throats.
There’s a little more optimism today because an uptick in the economy has boosted sales at some stores. But last year industry bosses announced some 7,000 retail store closures nationwide, eliminating tens of thousands of workers. J.C. Penney shut nearly 140 of its over 1,000 stores, and has said another eight stores and one of its fulfillment centers will close over the next few months, eliminating over 1,000 more jobs.
As the industry’s bleeding continues, many retail bosses are looking for some niche they can fill to keep going and generate profit. Target is incorporating CVS pharmacies and, in some stores, mini-Starbucks. Kohl’s just made a deal with German-owned Aldi to start selling groceries in some of its stores.
Kohl’s could have trouble though, since arch-competitor Walmart is the largest purveyor of groceries on the planet.
One niche J.C. Penney bosses are hoping to boost is its beauty department. The company just announced it would hire 6,500 stylists to expand its hair salons.