JCPenney's (JCP) Johnson Readies Axe for Upcoming 'Valentine's Day Massacre'

February 6, 2013 7:36 AM EST
JCPenney (NYSE: JCP) shares are lower amid a downgrade by Maxim Group earlier (more here) as well as murmurs that CEO Ron Johnson might be looking to trim its overall staff count.

According to the NY Post, Johnson is planning to fire about 10 percent of the retailers workforce around St. Valentine's Day. The move -- which should affect about 300 positions of the 3,000 at JCPenney's headquarters -- was scheduled to happen in January, but Johnson decided to delay the move until after the retailer's fiscal year ended, notes the Post.

Some speculate that Johnson wanted to move severance costs into this fiscal year because 2012 was already so bad. Others believe its simply a cash flow issue. Market data has JCPenney with about $525 million in cash as of the third quarter 2012, half the level from its prior year.

In total, Johnson's initial plan for JCPenney was to cut about $900 million in costs by the end of 2013. He needs to free up cash in the interim for new in-store roll out plans, which have largely been behind schedule.

Ahead of the bell, JCPenney is indicated over 1 percent lower.

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