Close Call

Whew.  What a day.  

Long story short:  Dh's work laid off 22% of its workforce today, approximately 120 people.  There was some scary times this morning, but dh is safe.  He was offered a different position in the company, starting tomorrow.  They cancelled this massive computer conversion project that he was 100% involved in.  That was his job.  Fortunately, he is very well respected and valued there, and we are so grateful that he was offered another position.  We were praying for good news & we are extremely blessed by God's Will in this matter.  

Here is an article about the layoffs from bizjournals.com:

Select Comfort cuts 22 percent of headquarters employees
Minneapolis / St. Paul Business Journal - by John Vomhof Jr. Staff Writer

Select Comfort Corp. announced Tuesday it is laying off 120 workers, or roughly 22 percent of the work force at its Plymouth headquarters.

The layoffs are part of a broader cost-cutting initiative “in response to further slowing of sales after Thanksgiving and in anticipation of continued macro-economic challenges in 2009,” the bed retailer said in a statement. The company is best known as the creator of the Sleep Number bed.

Most of the cuts will affect general and administrative or customer-service positions.

Select Comfort also said it will immediately cease the implementation of SAP-based IT software and all associated activities.

Those cuts and others that Select Comfort is exploring are expected to save the company approximately $15 million a year, beginning in the first quarter of 2009. However, the company will incur a charge of $35 million in the fourth quarter of 2008 related to asset impairments — approximately $4 million of severance payments and other cash costs.

“During the course of the year, we’ve navigated through an extremely difficult macro-economic environment by focusing on reducing our cost structure and improving product margins,” Select Comfort President and CEO Bill McLaughlin said in a statement. “We expect these macro-economic challenges to continue and possibly worsen in 2009. Therefore, we’ve taken additional actions to better align our cost and cash structure with our 2009 outlook for the economy.”

Select Comfort (Nasdaq: SCSS) also previously had announced that it is on track to close approximately 20 stores during the first quarter of 2009.

The company said Tuesday it will “continue to examine its store base, and expects to close additional stores throughout 2009,” and it “is assessing supplemental opportunities across all functions to reduce overall cost structure.”


jvomhof@bizjournals.com | (612) 288-2101