NEW YORK (CNN/Money) - Kmart Corp. is slashing 22,000 jobs and closing 284 stores as the discount retailer struggles to emerge from Chapter 11 bankruptcy.

The nation's No. 3 retailer, which filed for bankruptcy protection Jan. 22, said Friday it will take a charge of about $1.2 billion to pay for one-time costs of the moves, which it expects will save $550 million this year and $45 million annually after that.

Kmart, which had sales of $37 billion last year, also plans to dispose of more than $1 billion in inventory through store-closing sales, the company said.

The job cuts include a mix of hourly employees and salaried staff, Kmart spokesman Jack Ferry said, adding that additional headquarters positions will be reviewed after the stores are closed. "We really have to assess the affect of the store closings on our headquarters operation," Ferry said. "It is the intention to reduce corporate expenses."  

Click here for a detailed list of individual store closings

Kmart delayed the release of individual store closings Friday so affected employees could be notified. Among the states hardest hit are: Texas, which is losing 33 stores; Illinois, with 21 stores; Michigan,18 stores; California and Florida, with 16 stores each; Georgia, 14 stores; and Ohio, with 10 stores.

"The decision to close these under-performing stores, which do not meet our financial requirements going forward, is an integral part of the company's reorganization effort," CEO Charles Conaway said. "We are confident that doing so will provide the company with a healthier, more productive store base."

"The closings are important, but what is more important is the strategic direction they are going to take going forward," Wayne Hood, retail analyst at Prudential Securities, told Reuters Friday. "How are they going to improve profitability at existing stores?"

When Kmart filed for Chapter 11 bankruptcy protection in January, it was the biggest ever for a U.S. retailer, involving $17 billion in assets.

Wal-Mart, which is the low-price leader, and Target, which has done a good job of nabbing a more fashionable, slightly upscale niche, have squeezed Kmart over the last few years. Analysts believe Kmart needs to come up with a new image in order to survive.

"Kmart is going to have to find their niche somewhere in between or somewhere different, said Marshal Cohen, apparel analyst with market research firm NPD Group.

The company struggled with a stale image throughout the 1970s and early 1980s as competitors such as Wal-Mart emerged and many aging stores were executing poorly with sloppy appearances, out-of-stock items, and lackluster customer service.

Former CEO Floyd Hall is credited with a brief resurgence in the late 1980s by introducing the Big Kmart and Super Kmart formats that transformed many stores into more modern "big box" type that more closely resembled Wal-Mart's stores.

However, image issues returned in the booming 1990s with exuberant consumers turning to more upscale stores, or discount chains such as Target, that did a better job of marketing.

When the economy began to slide in 2000, jittery consumers worried about losing their jobs cut back on spending and began to frequent the discount chains. Yet Kmart steadily lost out to competitors and struggled with sluggish holiday sales.

The company hired Chuck Conaway in 2000 to launch a turnaround effort, but the new CEO has been criticized for trying to beat Wal-Mart, the low-price leader, on pricing, a strategy some analysts believe contributed to the bankruptcy filing. In a management shakeup after the filing, Kmart's board stripped Conaway of the chairmanship.

Nevertheless Conaway is credited with slashing expenses, reducing inventory, and streamlining the operation.

-- Reuters contributed to this report