Unemployment Forces Smead to Cut 50 at HQ

The company said that the high unemployment rate has lowered sales, forcing it to cut 50 employees at its Hastings facility, or about 5 percent of its total work force.

Smead Manufacturing Company is laying off 50 employees at its headquarters in Hastings due to decreased sales amid high unemployment rates.

A majority of the jobs being cut-about 95 percent-are manufacturing positions, Jim Riesterer, Smead's vice president of marketing, told Twin Cities Business on Tuesday morning. The rest are split between maintenance workers and supervisors.

The cuts represent about 5 percent of Smead's total work force of 1,000-and about 14 percent of its Minnesota work force of about 350.

Smead provides a wide range of organizational and filing products to offices across the nation. But with fewer people employed in offices following recession-prompted layoffs over the last couple of years, the demand for Smead's products has declined.

Riesterer said that the high unemployment rate, combined with businesses cutting supply budgets, has adversely affected Smead's sales. He wouldn't divulge specific sales figures for the company.

Minnesota's unemployment rate fell to 6.7 percent in January, but the national rate is still at about 9 percent, according to figures released earlier this month by the Minnesota Department of Employment and Economic Development.

More people are reusing office products that Smead offers, including file folders, Riesterer said. He added that competition has increased as competitor companies have moved production out of the country to lower costs, making it more difficult for Smead to compete.

Employees were notified about the cuts on Tuesday, and their last day will be March 18. Riesterer said that Smead is offering standard severance packages based on the number of years an employee has been with the company.

Riesterer said that the cuts are a “last resort” for Smead, which cut back in other general-expense areas, like travel and advertising, before cutting employees.

“It's a very difficult time for our employees,” Riesterer said. “Whenever we approach something like this, it is not something we do lightly.”