As the holidays approach, the last thing anyone wants to hear is that he or she is getting laid off from work. Unfortunately for the employees at a factory in Tampa, this is exactly what has happened.
On November 4, Kimball Electronics released a letter of warning addressed to the Mayor of Tampa, Jane Castor, stating that its plant in Tampa would begin to lay off employees starting January 5, 2025.
The letter also states that the company’s plan is to have the “separations” completed for all employees by June 30, 2025. At that point, the factory will be permanently shut down. About 250 employees will be impacted.
Although the letter offered no explanation, Kimball Electronics’ website does. The company’s financials and quarterly results are posted openly for review.
The layoffs are due to a significant decline in profits during the company’s first quarter of the fiscal new year, 2025. Comparing the net income from the first quarter last year to the first quarter this year, its net profit dropped from $10.754 million to $3.154 million. That is a $7.6 million, or about a 70.7%, difference.
Chief Executive Officer Richard D. Phillips commented on the disappointment felt by Kimball Electronics after last year’s first quarter was at a record-breaking high, but he said that this was an expected outcome.
He went on to say that the company is proceeding to “adjust costs, improve working capital management, and generate positive cash flow used to pay down” the company’s debt, which is currently “at a 2-year low”.
However, in an effort to enhance “strategic focus”, “leverage the capacity in our global footprint”, and “streamline the operating structure”, production is transferring from Tampa to Mexico and Jasper.
Phillips wrapped up his remarks with a statement about the company’s gratitude to its Tampa employees and how this decision was “based on the preferences of our customers, our outlook for US manufacturing, and an objective to improve the Company’s competitive positioning in the market, strengthen the balance sheet, increase liquidity, and improve financial flexibility”.
In other words, Phillips seemed to be saying that this was just about business, nothing personal.
Article by Ema Tibbetts