US department store retailer JCPenney Company Inc is axing around 10% of the staff at its corporate headquarters in Plano, Texas as part of an ongoing transformation of its business under new CEO Ron Johnson.

The changes are part of plans revealed by the retailer in January to achieve $900m in cost savings over the next two years. On Thursday (5 April), JC Penney said it expects to see around $200m in savings at its headquarters, where 600 jobs will go. It is also closing its customer call centre in Pittsburgh, Pennsylvania.

Johnson, the former head of retail at Apple Inc, has already outlined his vision to revamp the firm with a new low-pricing strategy, re-invented store experience, a new identity and a number of new brands.

He now says simplifying its management layers will give a more competitive operational structure, with wider spans of control and greater accountability throughout the organisation.

"We are transitioning from a culture based on management to one based on leadership," Johnson said.

"We are going to operate like a start-up. We are going to extend the reach and span of control of our very best talent. We are going to be nimble, quick to learn, quicker to react and totally committed to realising our vision to become America's favourite store."

The retailer, which operates 1,100 stores, has also pledged to save $400m from its store operations and $300m in advertising expenses by the end of 2013. This should reduce expenses to below 30% of sales and position the business to achieve an expense run rate of 27% by 2015.

"We are on the cutting edge of a new approach to retail," adds chief operating officer Mike Kramer. "Even this early on in our transformation, it's clear that many of the processes required under the old business model are no longer needed."

Changes so far have included rebuilding the merchandising and planning and allocation teams to continually curate the product offering, edit brands and assortments, and ultimately organise stores into a series of stores, shops and boutiques, which will feature newness on a monthly basis.

"Actions like this will enable us to quickly take advantage of a variety of expense savings opportunities while enhancing our profit formula for the long term," Kramer adds.