Monday, May 29, 2006

Tahitian Noni lays off 130 workers

My employer just laid off 130 of my co-workers. Here's their explaination why - as told by the Daily herald.
GRACE LEONG - Daily Herald

Tahitian Noni International laid off 130 employees in Provo and American Fork in a move to shift resources from its central Utah office to key regional offices and markets worldwide.

The layoffs, which represent nearly 8 percent of its global work force of 1,650, took effect Thursday and affected departments including training and support, call centers, marketing, and lower executive management in Provo and American Fork.

After the restructuring, the Provo-based dietary supplements maker's offices in Utah, which traditionally provide support for the company's global operations, will have 720 workers.

Its Provo headquarters and call center had 600 workers, while its American Fork research and development, manufacturing, and distribution plant had 250 workers.

The affected workers were given "very generous severance packages, outplacement support services, letters of recommendation and had their health insurance extended for two months," said Shon Whitney, the company's vice president of marketing communications.

The company last laid off 45 workers in 2002 in a cost-cutting move, he said.

"Thursday's cut backs took place across all departments," Whitney said. "Several managing directors and directors were also laid off."

"As we grow globally, it's hard to manufacture and provide international support from just one central location," Whitney said. "We will continue to have more than 700 workers in Utah. But we won't be as centralized as we used to be. We will continue to do R&D, product development manufacturing for North and South America from Utah.

"We're not restructuring the entire organization for cost-cutting reasons this time as much as we're shifting resources and jobs outside of Utah to seven of our key markets in the U.S., Japan, China, Taiwan, Germany, Norway and Sweden."

"By growing our regional support offices, we can move faster as a company and cater to markets in those countries as they are very different from Utah in terms of culture, product, customer service and even technology needs," he said. "We need to put our resources in areas where our sales are coming from."

While the United States is Tahitian Noni's largest market, accounting for 40 percent of its total sales of $530 million this past year, the remaining 60 percent of its sales are derived worldwide.

Japan is the company's second-largest market, accounting for 35 percent of total sales; Europe accounts for between 10 percent and 15 percent, while other markets worldwide account for the remainder.

Whitney said he couldn't immediately specify how much the company will spend on its globalization initiative, nor could he specify how many jobs are being added at its regional offices worldwide. The company is opening a manufacturing plant in China this fall and planning additional support offices in Glendale, Ariz., Japan, Taiwan and Germany.

Last year, the company opened four business support offices each in Japan and Taiwan, and three more offices in Dallas, Houston, Atlanta and New Jersey.

Founded in 1996, the company is operating in 73 markets worldwide and has manufacturing plants in Tahiti, Japan and Germany.

Grace Leong can be reached at 344-2910 or gleong@heraldextra.com.
This story appeared in The Daily Herald on page A1.

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