On December 5, local time, according to reports from many foreign media: New Balance is cutting some jobs in its home country. In a Worker Adjustment and Retraining Act filed in Massachusetts this week, the footwear and apparel brand revealed that 63 employees at its Boston factory would be affected. The layoffs, which will take effect on February 5, are related to the closure of the plant. The factory is located in the same neighborhood as the company’s 250,000-square-foot headquarters.
“New Balance is focused on ensuring that our business strategy, operations and structure are aligned with our most critical growth priorities. The COVID-19 pandemic has reinforced the need to accelerate our ongoing organizational transformation, which has resulted in headcount reductions in the United States, affecting a small portion of our U.S. workforce,” a company spokesperson said in a statement today.
“We have made a difficult The decision to close our Boston facility in February 2021 comes as we align the expansion of our domestic manufacturing plans with our business priorities and global consumer demand. “We have established a fair and respectful process and will support impacted employees throughout the transition. New Balance remains committed to manufacturing athletic shoes in the United States, and we also have plans to add jobs and production at our other New England facilities, including Opening a new factory in Methuen, Massachusetts, summer 2021.”
Today, New Balance has a total of approximately 900 workers. The new Methuen facility is approximately 80,000 square feet and is similar to the one in Brighton that has been in the works for some time. In 2019, the company received $900,000 in state tax credits, to be amortized over three years, and $272,000 in local property tax breaks to help subsidize what was then described as a $33 million project.
New Balance has generated approximately $4 billion in revenue each of the past three years. Preston said he expects revenue to be down this year, in large part due to the COVID-19 pandemic that led to widespread shutdowns in the spring and a second wave of shutdowns that took effect in Europe this fall.
The company’s digital sales have surged amid the pandemic, from 30% of New Balance’s business a year ago to about 50% today, and New Balance is working to adapt. Changes include a major upgrade to the company’s website in global markets, as well as new ship-from-store functionality to increase the availability of shoes of various models and sizes outside of warehouses.
“COVID accelerated everything,” Preston said. “It completely changes the way we operate, the way we need to be organized, the way we need resources.” In addition to its online channels, New Balance operates through its own brand stores (3,500 worldwide, primarily owned and operated by franchisees) and Its shoes are sold by third-party retailers, such as sporting goods chains and independent shoe stores. “Consumers… will return to stores, there’s no doubt about it,” Preston said. “But the convenience of buying online is here to stay.”</p
