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Exec Spills Addiction Shared by JCPenney HQ Employees

They used 35% of the HQ's Internet bandwidth to watch videos


JC PennyIn an interview with the Wall Street JournalJ.C. Penney (NYSE:JCP) COO Michael Kramer, said that before former Apple (NASDAQ:AAPL) executive Ron Johnson was hired to helm the chain’s turnaround, J.C. Penney’s corporate culture was “pathetic.”

For instance, Kramer, who was also recruited from Apple, noted that the 4,800 employees at the store’s headquarters used 35% of its bandwidth for recreation, watching as many as five million videos posted on Google‘s (NASDAQ:GOOG) YouTube in one month.

Martha Stewart’s Name to Get Scarce at J.C. Penney
Martha Stewart’s Name to Get Scarce at J.C. Penney

Under Johnson, headquarters staff has been trimmed by 1,600.

However, Johnson’s most ambitious strategy, ditching the store’s frequent sales and discounts has fallen flat with consumers. Kramer noted that management had expected sales decline of between 10% and 12% in the first quarter of last year, as the sales disappeared. In fact, sales fell 20% during the first quarter and 23% in the next quarter.

Faced with continued sales declines, and rising pressure from shareholders, Johnson has relented and the chain has begun to promote sales again.

Shares of J.C. Penney fell more than 2% in Tuesday morning trading.

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