Coldwater Creek announces employee layoffs
SANDPOINT — Like her fellow employees at Coldwater Creek, she figured layoffs were coming.
She just never thought she’d be among those let go by the company, which announced Tuesday it was cutting 20 percent of its full-time corporate workforce costs.
Like many left unemployed in the wake of corporate cuts, she joined her former coworkers at Laughing Dog Brewery, where a bittersweet atmosphere of both encouragement and despondence prevailed. Those laid off were joined by employees who survived the cuts in a show of solidarity, with jokes and work-related anecdotes intersected with deep frowns and long gazes into pint glasses.
The employees, both past and present, gathered at the brewery after Laughing Dog and local business EzyDog offered to buy a beer for those who were laid off.
The free drink was a welcome gesture, employees said, following the sweeping layoffs that touched every appendage of the apparel corporation’s national framework.
The downsizing sliced 20 percent of full-time corporate workforce expense from the corporate structure, company officials announced. As a result, the company expects to save between $20 million and $25 million in the 2014 fiscal year, although severance packages and restructuring costs will cost the company $3 million.
Some employees who gathered at the brewery indicated the cuts will shred positions as well as some existing employee benefits.
“The decision to downsize our workforce, in conjunction with our other cost reduction initiatives, was a very difficult one,” Coldwater Creek CEO Jill Dean said in a press release. “However, we believe it is a necessary step for the long-term success of the company as we strive to right-size our infrastructure to adapt to changes in our business.”
Despite the announcement, company stock finished Tuesday at $1 even, more or less in line with the past week.
While there’s no official indication as to how many employees were cut, one associate estimated it could be as many as 100 positions between all corporate offices.
According to both former and current employees, the layoffs were not unexpected, especially following recent news that the company was exploring “strategic alternatives,” including partnerships, joint ventures or a company merger or sale, to reinvigorate a sluggish bottom line. Internal speculation reportedly ran rampant as to what form those alternatives might take.
The company’s executive leadership has announced no decisions regarding major restructuring changes and intends to remain silent until an investigative committee finishes its work and the board makes a decision.
Based on the recent announcements, the sudden drop of the hammer was a dreaded but inevitable result for many employees — one that some have already weathered in the past. However, some personnel are heartened by what they see as a fairly equitable cost cutting initiative, with efforts made to trim very large salaries as well as low-level positions. For instance, one individual making almost $1 million a year was among those let go, according to some employees.
Only time will tell whether the downsizing and future initiatives will pull Coldwater Creek from its financial turmoil. A Sandpoint company founded in 1984 by Dennis and Ann Pence, Coldwater Creek has deep ties to the community and is a significant supporter of local nonprofits. Despite massive growth in the 1990s and early 2000s, some financial analysts believe the company may have bitten off more than it could chew with its significant expansion of retail markets prior to the recession.
As one employee put it, “It’s a $100 million company trying to be a $700 million company.”