Virco Makes Employee Buy-Out Offers to Cut CostsThursday, September 1, 2011
Furniture maker Virco Manufacturing Corp. announced Thursday that it’s offering early retirement and voluntary separation packages to about 1,050 employees in California and Arkansas to avoid layoffs.
The Torrance company, which makes products for schools and other institutions, on Thursday said the offer is one of several initiatives to cut costs. Virco has seen slowing sales of school furniture purchases by districts facing budget cuts.
Robert Dose, vice president of finance, said employees would be given a couple of weeks to make a decision, and declined to say how many positions would need to be eliminated in order to achieve the desired cost savings. The company also is planning two additional weeks of employee furloughs this fall and winter, which are traditionally slow months in the school furniture business.
Chief Executive Robert Virtue noted that his company is the only publicly traded U.S. furniture manufacturer that hasn't laid off workers since the recession began in 2008.
“Our track record in preserving American manufacturing jobs has been excellent,” Virtue said in a statement. “Unfortunately, the aftereffects of this recession and continuing economic volatility have cut deeper into the funding and budget reserves of our public school customers than at any time we can recall since our company’s founding in 1950.”
Virco in June reported a fiscal first quarter loss of $5.4 million on 2.4 percent lower sales of $24.2 million. Order rates were down by nearly 22 percent compared with the same period a year earlier.
The company made its announcement a few hours before the markets closed on Thursday. Shares closed down 2 cents, or less than 1 percent, to $2.38 on the Nasdaq.