L.L. Bean announced Wednesday that it will be laying off 175 employees -- most of them salaried -- in the company's biggest workforce reduction in seven years. The layoffs represent approximately 4 percent of the company's 4,200 year-round employees. The last major cutback occurred in 1995 when 350 positions were eliminated through attrition and layoffs because of the Asian financial crisis that effectively dried up one of Bean's most lucrative markets.
Chris McCormick, president and CEO of Bean, stated that the layoffs were "essential to the future success of the business," and that savings from the layoffs will now allow the company to invest in important strategic initiatives. No word on what those initiatives will be exactly.
Not every employee who will be laid off was told on Wednesday that he or she would be losing a job, SNEWS® has learned. Some are still awaiting news. Workers who are laid off will receive 30 days pay, plus between one to two weeks of additional pay for every year of employment. Those who are laid off will also be eligible for jobs that may open up at Bean in the next six months and every worker is eligible for outplacement and job search assistance.
Rich Donaldson, a spokesman for Bean, said Wednesday's announcement was only reached after a detailed review of the company begun in 1998 following several years of flat sales and the realization that the company was losing market share to competitors. During this time, the company redirected its efforts to more specialized catalogs, more diverse product mix, opening other retail stores, and placing stronger emphasis on Internet sales.
SNEWS® has also learned from company insiders that most of the jobs cuts came as a result of the company eliminating redundancies and that many more were affected simply because the positions were changed or were about to be changed.
SNEWS® View: Every company is being forced to exercise extreme fiscal responsibility as a result of market shifts and adjustments, and perennial billion dollar retail powerhouse Bean is no exception. While Bean had projected sales growth of a few percentage points for 2001 and looked to be on track to do just that, Sept. 11 derailed the retail giant's efforts, leaving the company with a 3 to 5 percent sales decrease for 2001 compared to 2000 -- not the direction any company wants to be heading. There are many talented folks on the Bean team though, and layoffs -- as painful as they always are -- will help the company to re-energize, and refocus its efforts. They are still a billion-dollar gorilla and we don't see that changing in the near future; however, we are sure Bean realizes that it needs to find a way to attract more youthful dollars for the long-term if it is to return to a pattern of growth instead of continued flat-line stagnation.