ZEELAND, Mich. (WOOD) — Two of West Michigan’s largest furniture makers are preparing for tens of millions of dollars in cuts.
Based in Zeeland on Wednesday MillerKnoll informed its shareholders that it plans to cut its budget by $30 million to $35 million in the third and fourth quarters “given the current macroeconomic backdrop.”
The report revealed that MillerKnoll recently incurred $500,000 in “restructuring fees.” MillerKnoll defines restructuring costs as “involving measures with targeted staff reductions”.
MillerKnoll’s plans include offering voluntary retirement packages, organizational restructuring and spending cuts, the financial report shows. The company also said it was more focused on online sales and was “more prudent in spending on stores and closing underperforming stores,” but didn’t disclose where those stores are located.
The company said smaller orders, project delays due to understaffed dealer design groups, and customer concerns about a possible global recession helped orders in the Americas jump 17.2% in the first quarter of fiscal 2023 compared to the same time last year. declined as MillerKnoll managed a “pandemic pent-up demand” for its products. But stronger selling in other markets helped cushion the loss. According to MillerKnoll, consolidated net sales for the first quarter increased 12.3% compared to the same time last year.
MillerKnoll said it recently raised prices to cover higher raw material costs and rising inflation, and plans to raise the prices of its products again in October to further cover the higher costs.
“We will continue to focus on what we can control and manage the business carefully,” the company said in the report.
Grand Rapids-based office furniture maker Steelcase is also trying to navigate the changing market by cutting back. in one Second quarter report Dave Sylvester, Steelcase’s senior vice president and chief financial officer, announced last week to shareholders that the company expects to cut up to 180 jobs in the third quarter as part of $20 million in budget cuts. Sylvester said the cuts would come from core businesses and corporate offices across America.
Sylvester said a recent drop in orders and fewer employees returning to the office than expected contributed to the existing inflation and supply chain problems Steelcase struggled with throughout the year. Steelcase reported a 20% decline in orders in the first three weeks of the current third quarter compared to the same period last year.
Sylvester expects the updated prices to “more fully offset” Steelcase’s inflationary costs in the coming quarters. He said the company is already cutting spending but now needs to cut further. Steelcase’s board of directors lowered its quarterly dividend to 10 cents per share this quarter from 14.5 cents per share previously.
Despite the cuts, Steelcase President and CEO Sara Armbruster said the company’s strategy remains unchanged.
“Looking ahead, we continue to believe in the value of people coming together in person to envision, create and achieve what we believe will drive investment to support new ways of working across all the markets we serve” , she explained in the report.
https://www.woodtv.com/news/grand-rapids/millerknoll-and-steelcase-to-cut-jobs-spending/ MillerKnoll and Steelcase are cutting jobs and spending