Last week, Federal Premium announced the layoff of 200 people, bringing the total number of layoffs from one of the most recognized names in ammunition to 310. The layoffs, taking place on October 6, cost the jobs of 190 hourly employees and 10 salaried staff from the HR, legal, and IT departments.
The timing of the layoffs is curious because fall is a period when ammunition manufacturers tend to pick up a bit with hunting seasons. Summer is typically the slowest time of year for retailers who sell ammunition. This is also coming off the heels of Vista Outdoor appointing a new CEO: Christopher Metz. Vista Outdoor is the parent company to Federal Premium and Christopher Metz took the helm of Vista on October 9th just a few days after the layoffs.
With these layoffs, combined with the staff reductions that occurred in March and June already, Federal Premium’s workforce has dropped from 1,430 to 1,020 in just the last 8 months. They actually had to turn down state funding earlier this year because their predicted employment goals were not going to be met.
The Star Tribune, a local St. Paul/Minneapolis newspaper in MN, quoted Vista Outdoor spokeswoman Amanda Covington as saying:
Vista Outdoor continues its efforts to drive cost-savings initiatives and improved efficiencies. We are managing our employee population to align with demand.
Those are obviously reasonable and desirable goals for any company, but it is strikingly eeire that the firearm industry; moreover, the ammunition category is that slow.
I’ll be honest, that is surprising, to say the least. Especially since we learned that the so-called “Trump Slump” doesn’t appear to be anything of the kind.
So what’s going on?
You got me. I’m not a business analyst by any stretch of the imagination. What I do know is this doesn’t look good for the firearm industry. About the only thing I can think of that could be done is to buy more guns, more ammunition, and spend more time at the range, possibly taking new people to the range for their first time shooting.
New shooters and an increased demand for both guns and ammo would go a long way toward helping the industry, to say nothing of creating legions of new Second Amendment advocates.
It’s a win-win.
Other than that, there’s not a whole lot to say. It’s troubling that companies like Federal Premium are having trouble making enough profit they’re able to retain their workforce. The total drawdown this year look like almost 30 percent of their staff. It doesn’t take a business analyst to know that’s just not a great sign of a healthy company.
The question then becomes if it’s a temporary slowdown following the Obama administration leaving office, or is it a sign of something else at work within the industry.
In the meantime, all we can really do is shoot more and hope that the companies we love stick around for a long, long time to come.
If not, however, not to worry. The Free Market will provide, as it always does.