Please ensure Javascript is enabled for purposes of website accessibility

La-Z-Boy Terminating 10% of Its Workforce

By Rhian Hunt – Jun 4, 2020 at 9:08PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The maker of comfortable chairs finds itself making some uncomfortable choices.

Well-known recliner and furniture maker La-Z-Boy (LZB -2.66%), finding the COVID-19 environment a poor fit for its business model, is acting to streamline its operations by terminating employees and closing facilities. The company said today it intends to permanently lay off approximately 10% of its employees worldwide, reducing its payroll by roughly 850 workers.

La-Z-Boy Chairman, President, and CEO Kurt Darrow said the terminations are "difficult decisions to make and we deeply regret the impact they will have on those employees who are affected," in addition to thanking the laid-off workers for their service. The company will also close its 60-year-old Newton, Mississippi, upholstery plant, moving the processes carried out there to other facilities across the United States.

A brown overstuffed recliner.

Image source: Getty Images.

La-Z-Boy initially responded to the rapid spread of coronavirus by shutting down its production entirely in March. Manufacture of furniture resumed in April, gradually scaling up through the present. In May, it donated $1 million worth of furniture to doctors, nurses, and other healthcare workers, a move brand ambassador and actress Kristen Bell said would provide "much-needed love and comfort."

The company is not yet operating at full capacity but continues to bring its plants back online as the reopening of states allows. Darrow says the facility closure in Newton and the workforce cuts won't affect the company's ability to meet demand, since it is drawing on "approximately 4.5 million square feet of remaining highly productive manufacturing space across the La-Z-Boy enterprise." He adds that the manufacturer is "confident we will continue to provide excellent service to our dealers and their customers" and is leveraging efficiencies to "right size our business for the long term." 

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

La-Z-Boy Stock Quote
La-Z-Boy
LZB
$23.09 (-2.66%) $0.63

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.