More Layoffs Likely at L.L. Bean

With sales down by at least 10% for the year, Freeport, ME-based L.L. Bean has started scaling back its workforce. In late October the $1.14 billion apparel and sporting goods cataloger offered about 500 of its 4,300 employees a voluntary-retirement package. And company spokesperson Rich Donaldson says that more layoffs are likely once L.L. Bean finalizes its 2003 budget in January. Last January, Bean had laid off 175 employees — or 4% of its workforce — in its biggest job reduction since 1995.

“Once we see the response to this voluntary retirement in conjunction with the budgeting process, we’ll determine what our staffing needs are going to be,” Donaldson says. “It’s unlikely that budgeting targets can be met without impacting staffing levels.”

Although he won’t share specific sales figures, Donaldson says that as of mid-October the cataloger had failed to meet its projections of flat sales. Bean’s circulation is down “slightly” from last year, although the company will still mail 200 million catalogs throughout 2003.

Bean’s disappointing performance is “a strong indication of [sagging] consumer confidence and people making more-prudent decisions on what they’re spending their discretionary income on,” Donaldson says. “We had hoped over a longer period of time to cut staff through attrition. But it’s going to be hard to avoid layoffs next year, because the manner in which business has gone this year has brought this to a head sooner than we would have liked.”

To be eligible for early retirement, employees must be more than 55 years old and have at least five years of continuous service with the cataloger. The package includes a month’s severance pay and a 25% increase in the regular pension plan benefit.

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