Creative Memories Slims Work Force
Veit, who took over as the company's leader last month after its last president resigned, made the announcement to employees Tuesday.
Cuts came mostly in St. Cloud at its Eighth Avenue and Clearwater Road offices. Some Yellow Springs, Ohio, workers were affected. Leaders eliminated jobs in operations, information technology and other support workers, Veit said. That represents 6 percent of its companywide work force, he said. It has 365-370 employees in St. Cloud, about 480 worldwide, he said.
Veit said sales suffered in the last two months of 2009 as well as the first four months of this year - more than he and his team anticipated. But he's not blaming the economy. The key to its success is its 45,000 direct sales consultants scattered around the world, Veit said. While he doesn't blame them for sales declines, he says Creative Memories needs to equip its direct sellers with good compensation, ample resources to sell its products, as well as new products to sell. In his words, Creative Memories needs to 'reignite the basics.'
He acknowledged the industry shift to online scrapbooking has hurt the business. But that's just a part of it, he said. As chief of the company, Veit brings a vision to focus on direct sales.
Creative Memories will roll out new products and tools for consultants in August. He declined to go into specifics. In the next six to nine months, it should be able to measure whether its efforts to build its direct sales team are working.
This is the second layoff in the last year at the company, which filed Chapter 11 bankruptcy in November 2008. It emerged from bankruptcy protection in February last year, then two months later cut 10 percent of its work force at both the Eighth Avenue and Clearwater Road facilities and dissolved its custom art framing division.
Last month, Global President and Chief Executive Officer Asha Morgan Moran resigned for undisclosed reasons. She had worked at the company since 1999. She was the last of the Morgan family members at Creative Memories and its parent The Antioch Co., started by her grandfather in 1926. Current and former workers at Creative Memories and Antioch are still trying to recover at least $50 million in retirement money, which was lost during the bankruptcy. One unresolved lawsuit contends that Asha Morgan Moran, as well as other former leaders and advisers, profited from the firm's demise.
The company ran into problems when an Antioch policy locked in stock value when employees left. Simultaneously, sales were suffering from a shift to more online scrapbooking. About 800 of Antioch's 1,150 workers resigned or were terminated between 2004 and 2007, creating stock payout obligations of about $190 million.
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