DM Layoffs Continue, Hiring Outlook Grim

Executive recruiter Jerry Bernhart expected to see a rash of direct marketing industry layoffs and hiring freezes this quarter. But he didn’t expect them to see them quite so soon.

In the past week alone, J.C. Penney, Home Depot, Eddie Bauer, The Paragon, and Dell all announced they were reducing head count.

A few weeks ago, Bernhart’s firm, Owatonna, MN-based Bernhart Associates Executive Search, released a hiring survey of 79 companies. Thirteen-percent of the companies polled said they have imposed a hiring freeze for the first quarter of 2008, while 12% said layoffs were on the way.

“Typically [the survey] is a lagging indicator,” says Bernhart. But he notes that he’s not that surprised at the grim news, “given the state of the economy, that the GDP is flat, and consumer spending is down.”

J.C. Penney is merging its buying and marketing departments, resulting in the loss of 200 jobs. Home Depot is axing 500, or 10%, of the workforce at its headquarters because of slowness in the home building market.

Gifts cataloger The Paragon, owned by BlueSky Brands, is closing its Westerly, RI-based complex and moving to the operations to a company-owned facility in West Virginia. All 119 employees that had been in Westerly will lose their jobs.

Eddie Bauer on Jan. 30 announced it was reorganizing its corporate staff across three locations, eliminating 123 positions in Seattle, Chicago, and Columbus. The job cuts represent 16% of the apparel cataloger/retailer’s corporate staff.

And Dell said Feb. 1 it is laying off more than 1,200 sales and support workers in North America. That includes 900 employees who will lose their jobs later this year when the company closes one of its two call centers in Canada. Other jobs were cut from the computer maker’s Ottawa and Oklahoma City locations.

That adds up to a lot of direct marketers out of work just in the first month of 2008, and Berhhart says he doesn’t see much of a relief for catalogers this year. It’s now an employer’s market, he notes, and direct merchants are being more selective in their hiring.

Who’s most at risk? Senior executives with direct marketing firms, he says. That’s because economic growth is limited, plus there are fewer start-ups in the industry. And many existing direct merchants are hiring lower-level employees to fill vacancies.

It doesn’t look good, but marketers should take heart: “I’m getting calls from direct marketing firms,” Berhhart says, “so things aren’t completely drying out.”

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