EAST GREENVILLE, Pa. - Workplace furniture giant Knoll - number 12 on the FDMC 300 - has announced plans to lay off 200 employees and close five of its U.S. showrooms in an effort to cut costs.
This is the furniture maker's third big cut this year - first laying off 200 and shutting down a Grand Rapids facility in January, and then laying off 275 in May due to COVID-19. It also froze salaries and suspended 401(k) contributions.
This round of cuts will affect employees "across all areas." The five closing showrooms are in Seattle, Phoenix, Miami, Denver, and Charlotte.
The layoffs and closures should complete by the end of the first quarter. Knoll expects the cuts will help it save $23 million annually.
Knoll recently released its third-quarter financial report, revealing several declines. Net sales decreased 13.2 percent to $309.4 million over 2019, largely due to a 25 percent decrease in office furniture sales. Gross margin decreased to 36 percent and adjusted EBITDA decreased $15.1 million to $37.3 million.
"In the foreseeable future, we expect corporate office demand to be meaningfully depressed," Knoll wrote in an earnings report. "Our sober assessment is that we are looking at a BIFMA market post-Covid that is approximately 20% smaller than pre-pandemic conditions as companies make do with fewer workers and work from home settles in as a more permanent piece of the workplace pie. Based on some of the commercial real estate data we have seen, we do not believe that demand for office space will improve meaningfully until late 2022, and we expect demand to fall as much as 30-40% in the interim as clients remain hesitant to return to the workplace until they are confident that they can keep their employees safe; that seems to translate to the introduction of a vaccine along with other measures like wearing masks and social distancing."
The company did however see a 434 percent increase in the size of its e-commerce business over 2019.
"We are continuing to aggressively attack costs in the Office business. In 2021, we will further consolidate warehouse locations to reduce costs and improve e-commerce capabilities; exit smaller leased facilities and, where it improves margins and leverages core capabilities, in-source products from third party vendors."
Before this year's layoffs, Knoll employed more than 3,700 people worldwide.
Have something to say? Share your thoughts with us in the comments below.