La-Z-Boy lays off 6,800, implements major salary reductions
March 30, 2020 | 9:44 am CDT
MONROE, Mich. - Residential furniture giant La-Z-Boy has unveiled its coronavirus action plan, which includes layoffs of around 6,800 employees - or 70 percent of its total workforce.
The plan will implement:
- A salary reduction of 50% for senior management and 25% for salaried employees until further notice; additionally, the board of directors will forego the cash portion of its compensation until further notice
- A freeze of the company’s 401(k) match
- Elimination of all non-essential operating expenses and capital expenditures
- Elimination of the June quarterly dividend and termination of the share repurchase program indefinitely to prioritize near-term financial flexibility
- The temporary closure of all 155 stores. 130 have already been closed. Regional distribution centers will also close after all current orders are delivered.
“As we move through this unprecedented global pandemic, keeping our employees, customers and the communities in which we operate safe and healthy is of paramount importance," said CEO Kurt L. Darrow in a release. "Throughout this period, La-Z-Boy has followed all government regulations and recommendations and implemented best-practice health and safety protocols. At this time, the company is not aware of any confirmed coronavirus cases across the enterprise and will continue our efforts to keep facilities clean and safe.
"However, our leadership team has determined that more significant measures are necessary to protect the health and safety of our employees, and to assist in the national effort to combat the spread of COVID-19. We will continue to assess the evolving situation to determine the cadence to re-start operations and open stores. During this challenging time, we will focus on managing our business to preserve cash and to ensure the continued liquidity of the company. While the decisions made were extremely difficult and we deeply regret the impact they will have on those affected and their families, they are deemed necessary as we face one of the most challenging periods in our history.
"Moving forward, with a strong financial foundation, the powerful La-Z-Boy brand, and our dedicated and hard-working people, I am confident the company will weather this storm. Although the path forward will likely be complex and unpredictable, we expect to return to full operations when the crisis lifts, and emerge with strength."
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