More layoffs at Pelco

For those looking for signs of the economic recovery, at least one major surveillance manufacturer isn't out of the woods, yet: Pelco Realigns Organization to Meet 2010 Economic Conditions Good headline writer, anyway, as that's a fairly positive spin to put on it. The reality is that most companies have already celebrated their layoffs over the past year and Wall Street generally rewards them with higher stock prices, so there's really nothing to be ashamed of here.

Clovis, CA (January 13, 2010) – Pelco management announced today that as the result of slower than expected sales recovery from early 2009 declines, increased efficiency in manufacturing, and our anticipation of weak industry growth for 2010, the company has decided to reduce the size of its workforce.

All of that makes sense. People who think 2010 is going to be a major rebound are looking at things with rose-colored glasses. Until we get a handle on unemployment, the U.S. economy is going to drag, and if you rely on the commercial market the way Pelco does, you're going to struggle.

“Layoffs are and have always been a last option for Pelco”, said Dean Meyer, Pelco President and CEO. “This is a very unfortunate situation, but we must realign the size of operations to better match current economic conditions and to adjust for manufacturing improvements implemented over the last 12 months. This has been a very difficult conclusion for us to reach.”

To Meyer's credit, he's been out in front of all the bad news Pelco's put out in the last 12 months or so. There's really no reason why they have to broadcast something like this. They could have hid it somehow if they had tried hard enough.

Officials added that even though an aggressive, company-wide approach to cost management was implemented throughout 2009 — including work furloughs, salary freezes, out-sourcing of non-core business functions — the continued economic downturn and the shift of business toward emerging economies has created an environment that cannot sustain the company’s current U.S.-based operations. According to officials, about 100 employees are expected to be released. The reduced work­force will not have any impact on the company’s ability to serve and support customers.

That last sentence might be wishful thinking, but maybe it's true that the business is down far enough that they can handle all the service and support with fewer people, or maybe they're keeping those customer-facing staffers relatively intact.

“We are doing our utmost to support those affected,” said Meyer. “As we go through these difficult changes, I appreciate the support and understanding of the entire company. Pelco will do everything we can to help these employees find new opportunities.” Pelco will continue to build its reputation for providing industry-leading technologies and customer ser­vice by continuing to streamline operations, increasing its front-line selling resources and focusing on its core business.

I'm afraid "streamlining" will be something of a norm for the foreseeable future throughout the industry. While some companies are definitely growing and adding people, manufacturers of traditional products are certainly going to have a hard time avoiding "streamlining" without some major innovation and new products that create new markets. I'll check in for an interview with Dean. We'll see what happens.