An unexpected furniture company is now closing down, affecting more than 200 workers, according to a WARN notice.
Furniture and textile maker HNI Corp. plans to close its facility in Hickory, North Carolina, by April 2025, the company announced May 20.
A total of 221 employees will be laid off due to the closure and operations will be consolidated to HNI’s other facilities in North America.
The first round of layoffs will begin Oct. 13, according to a Worker Adjustment and Retraining Notification Act letter to the state.
The closure and consolidation will also help the HNI save $11 million a year by 2026 and cut costs associated with its acquisition of furnishing maker Kimball International last June.
Moving its Hickory operations to its other facilities is part of the Kimball acquisition strategy, the company said in the release.
“This is a strategic decision to optimize our operational footprint and improve business performance,” HNI Chairman, President and CEO Jeff Lorenger said in a statement.
“This move will improve the customer experience for our trade partners and end-users, and more efficiently deliver on our commitments to safety, quality, lead-times, and reliability.”
HNI completed its $485 million Kimball International acquisition in June 2023, gaining eight more manufacturing facilities in the U.S., consisting of two in Kentucky and six in Indiana, according to a March 2023 securities filing.
The acquisition was expected to save HNI $25 million in operating costs within three years of closing the transaction, including consolidation, procurement logistics integration and improved productivity.
Now, with Kimball’s facilities being integrated, savings are expected to increase to an estimated $50 million, which includes the $11 million in consolidation and $4 million in the company’s procurement efforts.
HNI expects the consolidation will improve its productivity and operations without losing capacity or causing disruption, the company said in the release.
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Other Economy News Today
Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.
First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.
Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.
That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.
The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.
US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.
Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.
Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.
“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”
“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.
The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.
While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”
Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”
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Also Read: A Giant Company Now Announces Unexpected Layoffs in Virginia
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