Two Central Ohio Companies Announce Layoffs
Two more Central Ohio businesses join the list of companies to lay off workers in an effort to cut expenses. Limited Brands and The Longaberger Company announced almost 700 layoffs combined.
"No one company or community is immune from this economic down turn and it's no different for us," Tom Matthews said.
Matthews is a Longaberger spokesperson. He said the company, known for its handmade baskets, is taking a conservative approach to ride out the recession - and that includes cutting 295 workers. Forty percent of those layoffs will come from the manufacturing plant in Muskingum County.
Matthews said basket sales were soft in January. He said February was projected to meet expectations but,"We've lowered our expectations for the year because of everything that obviously we're seeing in the challenging economy. And we need to be sure that we can withstand any economic situation that may unfold."
In addition to the layoffs, all salaried employees will take a pay cut.
Longaberger was not alone in its layoff announcement, though. Limited Brands said 400 corporate workers will lose jobs next week. The Victoria's Secret parent company had a bad fourth quarter with a 10 percent decrease in sales. It's profits were down $113 million over the same time last year.
In a written statement Limited CEO Les Wexner said the cuts are necessary to keep the company going in the recession.
Ohio University's School of Human and Consumer Sciences director Ann Paulins said Limited probably has too many stores.
"It's likely they will be looking for which strategic stores within a marketplace to close, which is bad news for mall developers and owners," she said.
Paulins said consumer confidence levels are still very low and people are scrutinizing every purchase they make, especially the ones that are not essential.
"Not making additional discretionary purchases in the terms of clothes and other non-necessities. I mean we're even looking at what foods we are and aren't going to be purchasing based on their price. So, that's tough for retailers," Paulins said. To remain viable in the marketplace, Paulins said retailers like Limited Brands will need to reduce inventory and cut merchandising costs.
"We'll continue to see a great effort within the company as they're producing merchandise to seek low-cost suppliers. And they may scale back on the complexity of their merchandise mix because turn over is important; they want to put merchandise in that's going to sell. They don't want to have merchandise where there's too choice and then some items aren't selected," she said.
Paulins predicts some retailers will make it out of the recession but they'll have to find a niche on which consumers will spend money.