Steelcase Inc., the designer and maker of workplace furniture, has laid off about 130 employees in recent weeks at its 985,000-square-foot Tustin facility,a nearly 17% staff reduction.
Twenty of the employees were in salaried positions, while 110 were hourly workers.
“Steelcase announced at the end of August to engage in North America-wide layoffs, and the Tustin layoff activity is a reflection of that decision,” said Steelcase spokeswoman Heidi Hennink. “With uncertainty about the economy a lot of businesses have held back in making major capital expenditures.”
Typically, office spending is cut early in a business downturn and recovers later during an upcycle, Hennink said.
About 650 employees remain at the Tustin facility, which makes workstation furniture including chairs and lateral files.
Grand Rapids, Mich.-based Steelcase has laid off about 3,500 workers throughout North America since January. Most of the layoffs took place in western Michigan and at a manufacturing site in Athens, Ala.
Moody’s Investors Service last week downgraded Steelcase’s rating for priority long-term debt that has no pledged collateral, offering a “stable” outlook on the rating and leaving the company’s eligible short-term debt rating unchanged.
Moody’s said its actions “reflect the expectation that an extended downturn in the office furniture market is likely to pressure Steelcase’s revenues, profits and cash flow.”
Moody’s overall retained a stable rating outlook due to Steelcase’s positioning in the industry and also because of its strategy to lower costs by reducing operating overhead. n
