Joining other big retailers in temporary workforce reductions, J.C. Penney (NYSE:JCP) is furloughing most of its hourly store associates due to the COVID-19 pandemic, which is forcing non-essential businesses across the country to temporarily close their doors. The company announced the measure as part of its latest business update, released on Tuesday.
Furloughed employees who are enrolled in the company's benefits program will continue to receive those benefits, and J.C. Penney said it will cover the employee's shares of their insurance plan premiums. Most furloughed workers will be eligible for unemployment benefits from their states as well.
The department store chain also announced it was extending the period of its store closures, and did not provide even an approximate date as to when they might reopen. Instead, the company said it will follow state, federal, and local government guidance in the matter. It's continuing to operate and fulfill e-commerce orders.
The retailer has also taken steps to shore up its finances, deferring capital expenditures and putting a freeze on hiring, among other moves.
Management attempted to a positive spin on its announcements. "We remain optimistic about J.C. Penney's ability to weather this pandemic," said CEO Jill Soltau in the update. "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."
However, the company, already viewed as one of the major victims of the e-commerce driven retail apocalypse, was struggling well before the coronavirus hit. As a result, there are serious doubts about J.C. Penney's ability to survive as a viable business.
On Tuesday, J.C. Penney's shares declined 1.8%, in line with other consumer goods stocks and the broader stock market.