J.C. Penney (NYSE:JCP) will fire 2,000 people and close 33 underperforming stores as part of a revamped turnaround plan it hopes will stem ballooning losses.
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The struggling department-store chain said late Wednesday the move will generate annual savings of roughly $65 million beginning in 2014. Penney expects to incur charges of $26 million in the fourth quarter and $17 million in future periods related to severance and closure expenses.
"As we continue to progress toward long-term profitable growth, it is necessary to re-examine the financial performance of our store portfolio and adjust our national footprint accordingly," Penney CEO Mike Ullman said in a statement.
Shares of the retailer fell more than 2.5% to $6.83 in after-hours trade following the announcement. They have fallen more than 62% over the last 12 months.
The move comes nearly two months after the company reported a much deeper third-quarter loss on weaker-than-expected sales.
Penney says the remaining inventory in those stores will be sold over the next several months, with final closing anticipated by early May. It still plans to open a new store later this year in Brooklyn, N.Y.