JCPenney is worried about employee morale and its ability to retain key personnel.Thousands of workers have been laid off since CEO Ron Johnson took the helm, and with numbers taking such big hits, the people on the ground probably aren’t very happy about it.
And that could affect its operations.
“These workforce changes may negatively impact communication, morale, management cohesiveness and effective decision-making, which could have an adverse impact on our operating efficiency,” JCPenney said in its latest SEC filing.
When we spoke with JCPenney retail workers about what was happening at the company in the early stages of the transformation, they were near-universally angry about all the layoffs and how they were being treated.
JCPenney listed “the failure to retain, attract and motivate our employees, including employees in key positions,” as a “risk factor” going forward.
Bloomberg’s Sapna Maheshwari noted that JCPenney didn’t use this sort of language in its Q2 filing.
Here’s all the corporate-speak from the filing:
The transformational changes to our business model will require new competencies in some positions, which may be difficult to obtain at a reasonable cost, if at all. Our ability to meet our changing labour needs while controlling our costs is also subject to external factors such as unemployment levels, competing wages and potential union organising efforts. Because of our lower than expected operating results during this transition year, we have not generally paid bonuses in the first three quarters of the year, and salary increases and incentive compensation opportunities could be limited. Any prolonged inability to provide salary increases or incentive compensation opportunities during our transformation could have an adverse impact on our ability to attract, retain and motivate our employees. If we are unable to retain, attract and motivate talented employees with the appropriate skill sets for our new business model, or if the changes to our organizational structure or business model adversely affect morale or retention, we may not achieve our objectives and our results of operations could be adversely impacted. In addition, the loss of one or more of our key personnel or the inability to effectively identify a suitable successor to a key role in our senior management could have a material adverse effect on our business.
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