Actions

Steelcase temporarily laying off part of workforce and reducing some salaries

WXMI_Default-Image_1280x720.png
Posted at 6:59 PM, Mar 24, 2020
and last updated 2020-03-26 19:01:47-04

GRAND RAPIDS, Mich. — The office furniture maker Steelcase is making several moves to cut its employee-related costs amid the coronavirus pandemic.

Layoffs

Steelcase is temporarily laying off "nearly all" of its hourly manufacturing and distribution employees in Michigan, according to its earnings announcement on Tuesday.

The company said it will pay the "full cost" of the employees' health insurance premiums during the period.

The workers will be eligible for state unemployment benefits, according to Katie Woodruff, global corporate communications manager at Steelcase, on Wednesday.

It did not disclose how many workers are affected or the duration of the layoff.

The length will be "dictated by the scope and severity of the COVID-19 pandemic and in accordance with federal and state law," Woodruff said.

Steelcase operates two plants in Kentwood, one plant in Grand Rapids and one distribution center in Kentwood.

The move is tied to Steelcase temporarily reducing or suspending operations at "many" of its plants and distribution centers across the world, "typically in response to government orders related to COVID-19."

Across the U.S., Steelcase is complying with "stay home, stay safe" directives and temporarily "ramping down operations," Woodruff said. This includes locations in California, Georgia, Pennsylvania, Texas and Washington.

Certain Steelcase operations, however, remain open for "essential life-sustaining businesses," she said.

Woodruff added that In China, Steelcase's factories and offices have re-opened and are "operating normally."

Steelcase employs 12,000 people, according to its website.

Salaries

As part of its reduction in "people costs," Steelcase is temporarily reducing the base pay of its CEO, Jim Keane, to $1 and by 60% for its executive team.

Members of its board of directors have "elected" to reduce their cash retainer to zero.

Steelcase also said "nearly all" U.S.-based salaried employees will temporarily take a 50% cut in base pay and a "similar reduction" in hours.

It will pay all of their health insurance premiums during the period, Woodruff said.

Steelcase is continuing to serve customers by "planning future projects" and supporting "many other activities" through salaried workers across the globe who are telecommuting.

Savings

The company, founded in 1912, is taking the actions "to avoid permanent headcount reductions" and "come through this crisis together."

It did not disclose how much it will save through the layoffs and salary reductions.

"We cannot comment on exact numbers here," Woodruff said. "However, the actions we have announced do not include terminations or permanent plant closures.

"We’ve worked hard to find the right balance between protecting all our employees and protecting the future viability of our business."

Earnings

Also on Tuesday, Steelcase reported $66.5 million in net income for the fourth quarter on $946 million in revenue, up from $22.6 million year over year.

Year-end net income was $199.7 million on $3.7 billion in revenue, up from $126 million year over year.