Because of what it has described as challenging and unexpected business conditions, Klaussner Home Furnishings said that the company and its subsidiaries are unexpectedly winding down operations.
The company announced on its website Monday that its lending source has unexpectedly refused to continue to fund the company’s operations.
“This was not reasonably foreseeable, but due to these unexpected circumstances, Klaussner can no longer sustain its operations. As a result, Klaussner has made the difficult decision to permanently cease operations and is providing as much notice as possible,” the company said on its website.
Klaussner has been in business since 1963 and is said to employ nearly 900 workers at its seven area manufacturing facilities and its headquarters operations in Asheboro.
The company said it was closing its facilities entirely with the process already underway as of Monday, Aug. 7.
The company said it is working to provide information and resources to assist with the next steps for displaced employees as it becomes available. It also noted that this information will be communicated directly with employees based on the contact information it has on file.
Company President and CEO David Cybulski did not return a phone call Monday afternoon seeking comment.
Klaussner has submitted a WARN Act Notice with the North Carolina Department of Commerce that has alerted the department of its plans to lay off 884 workers as a result of its sudden closing announced Monday.
However, it was not clear whether the company plans to pay workers through the 60-day period generally required under the federal WARN Act.
Such notices are typically made 60 days before a mass layoff to give workers enough time to start looking for other jobs. This also allows them to continue getting pay and benefits through this 60-day period before a closing.
However, there are some exceptions to this rule including:
+ Faltering company: In this situation, a company experiencing financial challenges will seek new capital or business to stay open. Giving notice would negatively impact its ability to secure that capital or business.
+ Unforeseeable business circumstances: This applies to closings and layoffs that result from business circumstances that were not reasonably foreseeable at the time that the 60-day notice would have typically been made.
+ A natural disaster: This exception applies where a closing or layoff occurs is the direct result of a natural disaster, such as a flood, earthquake, drought or storm.
The Aug. 7 letter said Klaussner plans to close its facilities in and around Asheboro, North Carolina, starting Monday through August 21. As all positions are being eliminated, it said that no bumping rights exist for the impacted employees. Bumping rights typically allow senior level employees to accept another position held by a less senior level employee.
The letter repeated information posted on the company’s website late Monday that noted its lending source has unexpectedly refused to continue to fund its operations.
“The outcome was not reasonably foreseeable, but due to these unexpected circumstances, the company can no longer sustain the operations,” the letter to the state DOC said. “As a result, the company has made the difficult decision to cease operations and is providing as much notice as possible.”
The positions impacted include the following:
+ 26 located at its 2206 Dumont St facility in Asheboro
+ 556 located at its 405 Lewallen Road headquarters facility and main upholstery plant in Asheboro
+ 64 at its facility at 4400 U.S. Hwy 220 South in Asheboro
+ 15 at its facility at 4402 U.S. Hwy 20 South in Asheboro.
+ 127 at its facility at 905 Hwy 49 South in Asheboro.
+ 38 at its facility at 907 Hwy 49 South in Asheboro
+ 58 at its facility at 68 Industrial Road in Candor.
Within 48 hours of receiving a WARN Act notice, the state deploys what is called a Rapid Response Team to help the company and its affected workers. Services it offers to businesses and their workers can vary based on circumstance of the layoff. Below are some of the services it typically offers in these situations.
- Developing a transitional plan of action best suited to the workers of the affected business.
- Distributing information on public services for job seekers.
- Developing a plan to access funds and services for workers, including Trade Adjustment Assistance and Pell grants.
- Reducing worker absenteeism to achieve completion of production.
- Sharing experiences from handling previous closures and layoff events.
- Providing convenient on-site services to ease the transition for workers.
- Offering specialized assistance, such as job fairs, financial planning workshops, and interest/aptitude assessments or other specialized services.
Sister publication Home News Now contacted company President and CEO David Cybulski regarding the sudden layoff, but is still awaiting a response. It also has contacted Philip Waddell, chief human resources officer to learn more details about the sudden closing and what types of benefits are being granted to the workers.
It also has contacted company owner Monomoy Capital but has not yet received a response.