PONTOTOC, Miss. — The parent of Southern Motion and Fusion Furniture said it laid off about 280 workers this week now that furniture demand has slowed.
In an early version of this story, a source said the layoffs could amount to more than one-quarter of the upholstery producers’ combined workforce, but the actual reduction turned out to be smaller.
“Due to a temporary industry slowdown in the demand for upholstered furniture, Southern Furniture Industries … regretfully had to reduce our workforce this past week in order to match our production capacity to the current demand environment,” President and CEO Mark Weber said in a statement Thursday.
“This reduction impacted less than 15% of our approximately 1,900 associates across multiple sites throughout North Mississippi. These are always difficult decisions, and it is our hope to rehire these associates in the near future as demand improves.”
The move followed a call earlier this month for voluntary layoffs. Weber estimated roughly 20 employees stepped up.
“We completed the notifications to the remaining work force here within the last hour,” he told Home News Now Thursday, adding that the layoffs occurred at all eight Southern Motion and Fusion facilities across Mississippi.
“We worked hard to restore our employee base coming out of the pandemic in 2020,” Weber said. “They’re valuable to us, but unfortunately with the demand environment where it’s at, we needed to rightsize it so the remaining employees can get 36 to 40 hours of work a week. But as soon as demand improves, we would love to get those employees back.”
Predicting the timing for when that will happen is challenging given the many variables at play, Weber said. Southern Motion and Fusion are not container-driven importers, but that hasn’t stopped them from feeling the impact of a global supply chain that seized up for months on end before loosening up more recently and unloading shipments faster than retailers and consumers could handle.
“The biggest issue is excess supply at our retailers,” he said. “That, combined with demand slowing down, has really exacerbated the situation,” Weber said. “We’re a domestic manufacturer, but a lot (retailers’ excess inventory) is import product that has been committed to in some cases months ahead of time.
“The supply chain to Asia got extended during the pandemic. In some cases, people were ordering 16 to 20 weeks out. You could have four months of orders in the supply chain at (what was) a higher demand rate.”
So even after consumer demand improves, it could take several months more for retailers to get back to an inventory position that frees them up to order again.
He noted that upholstery business is normally stronger in the fall, “So we’re hoping by then that we start to see order rates improving. But it’s hard to guess.”
Southern Motion was acquired by private equity firm Gainline Capital in 2017 and went on to acquire Fusion Furniture a year later.