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March 21, 2007
FRAZEYSBURG - Tom Heading wasn't exactly surprised by Tuesday's announcement that he and more than 700 employees were being laid off by The Longaberger Co.
The Coshocton man, who has worked as a basketmaker since 1995, took the news in stride after learning Monday something was afoot, when five supervisors were told they were being laid off.
"The rumors hit everyone like wildfire when that happened," he said. "My first big worry when I went in this morning (Tuesday morning) was that I wouldn't be one of the first ones called back."
"It's not fun, but we're prepared," added Heading's wife, Caroline, who worked for Longaberger from 1995-98. "And Tom does have a return date, unlike a bunch of the employees."
The numbers might look dire to naysayers, but the announcement of 710 employees being laid off will put the company in a position for future growth, company officials said.
"It's a temporary reduction," said Tom Matthews, vice president of corporate communications. "The bulk of the employees are due to be called back by June 18 and additional employees as business conditions dictate."
The company said 471 of the employees will return to work on June 18 in anticipation of national sales meetings in July, when sales historically rise and remain strong through the holiday season. The callback of the remaining 239 employees will depend upon business conditions in the latter half of the year.
The seasonal reduction will help the company accelerate its five-year growth plans, Matthews said.
"We're positioning for sustainable growth," Matthews said, through strategies such as a sales-sharing plan with home consultants, increasing product lines, and the rolling out of the company's new Factory Store and other retail outlets which opened at The Homestead last week.
Despite the job cutbacks, reaction around the area to the news was generally positive.
"It definitely impacts the local economy, because Longaberger is the largest single employer in Muskingum and surrounding counties," said Tom Poorman, director of the Zanesville-Muskingum County Chamber of Commerce. "But it is our understanding that this is a seasonal fluctuation, a normal part of doing business."
Poorman said the layoffs were a needed step to help the company manage its inventory based on current sales trends.
"They have to adjust the workforce to the sales they are doing," he said. "That's what keeps a company alive and thriving fiscally."
Tricia Kidd, director of the Dresden Village Association, said the company's move was understandable.
"What we've seen in the last few years is that in the spring, sales level off, and they need to align their inventory so that they can bring most of the employees back in June or July, so they are ready for the second half of the year," Kidd said.
She said Dresden's shops which do steady business from tourists visiting the company's original home could still be impacted "somewhat, because we do have many local customers" who work for the company.
But Kidd thinks that the duration of the layoff could be shortened due to all of the new opportunities being explored by company, like the new Factory Store at The Homestead.
"I can't help but think that could decrease the layoff amount," she said.
The company's most recent layoffs came in July 2005, including 383 manufacturing employees at Frazeysburg and 66 administrative positions, primarily at its Newark corporate headquarters. The company also announced a layoff of 360 manufacturing and distribution employees in April 2005. In November 2004, it called back 552 workers after a six-week furlough. But 150 positions were added last summer and the company announced its five-year turnaround plans.
Heading said that sales started to slide just before Christmas, and the company has been pushing product since January in efforts to build momentum.
"The online sales start May 1, and we figured they would wait until after that to make a decision (on the layoffs)," he said. "But early spring is usually our soft season, so it's not a big surprise."
The Headings said they will survive the next 12 weeks, as they have all of the other workforce fluctuations over the past dozen years, and believe in the company.
"I think Jim Klein is the right guy for the job. He's like Dave (Longaberger), but with better money management skills, and he's making good decisions for the company's future," she said.
As for Tom, he said he and Caroline will treat the next few weeks as a mini-vacation, albeit one spent at home.
"I've got a 'Honey-Do' list I'll pretty much be able to knock out," he said. "And I'm going back to school, just taking one class at a time, to become a science teacher. Now, maybe I'll be able to take three classes instead of one. There's always a silver lining."
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