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.
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."