New Era Cap announced Friday it is instituting a temporary furlough of the majority of its U.S. workforce in response to "rapidly deteriorating business conditions resulting from the Coronavirus pandemic."
The company says due to the cancellation of professional sporting events around the world and a steep decline in orders from its major retail customers it is making this decision to protect its business.
The furlough will be effective March 30 and impact around 70 percent of its U.S. workforce of 600 employees. This includes Buffalo, New York City, Miami, and Irvine.
New Era says during the furlough the company expects to run for 60 days with a limited number of employees in certain essential functions.
“In my 40 years at New Era, I have never experienced a series of events that have so quickly and adversely impacted our business,” said Chris Koch, New Era’s CEO. “We felt we had no option but to move quickly to a temporary furlough in order to ride out this sudden economic downturn. This decision was not made lightly, and I regret the impact it will have on our employees. Their dedication and commitment to my family’s business has always been what has made New Era successful and we will do everything we can to get our employees back to work as soon as possible when our industry begins to return to normal.”
Koch will forego his salary for the remainder of the year and there will be a reduction of compensation of senior employees who remain on the job during the furlough period in an attempt to further cut costs.
"New Era plans to do everything it can to support its employees during this furlough period – including providing them with full medical coverage. The company will also continue to provide support services through its Employee Assistance Program (EAP), and help those furloughed access local, state and federal employee programs," a release states.