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Bose Corporation to shed 1,000 workers
January 21, 2009 13:47 IST
Battered by the slumping US economy and setbacks in the consumer electronics business, Bose Corporation, known for its high-end audio products, will cut 1,000 jobs, about 10 per cent of its global workforce.
The privately-held company founded by Indian-American Amar G Bose would not say how many positions would be eliminated at its corporate headquarters in Massachusetts or how many workers it employs there.
Bose issued a statement on Tuesday saying it was 'restructuring its operations in response to the decline of the global economy, and its impact on consumer spending.'
It said the cutback would affect unspecified 'select areas, including manufacturing.' The company declined to provide further details or make an executive available to discuss its finances and restructuring plan.
Industry analysts, quoted by Boston Globe, said all consumer electronics manufacturers and retailers have been hurt by the deepening recession, which recently has pinched spending by affluent consumers - an important part of Bose's customer base -- as well as low and middle-income buyers.
Circuit City, the second-largest US electronics chain and one of Bose's top customers, is shutting down 567 stores nationwide, including 19 in Massachusetts.
"We have been staffed for a growing economy, not a global recession," Bose said in its prepared statement. "As a global company, we are responding to these challenges."
The statement said the company's job cuts would 'help us prepare for the future, and preserve our focus on research, innovation, quality, and our customers.'
Bose Corporation was founded in 1964 by Dr Bose, then professor of electrical engineering at the Massachusetts Institute of Technology.
"Bose's premium products have a pretty hefty price point -- thousands of dollars for their top-of-the-line home theatre systems," said former Bose retail director Doug Fleener, a retail consultant for the Lexington research firm Dynamic Experiences Group.
"What you're seeing is that people are trading down.
May be instead of buying the $3,000 audio system, people are going for the $1,500 system."
Ross Rubin, director of industry analysis at research firm NPD Group in New York, said Bose appears to be losing market share in the home theatre category to lower-priced rivals such as Sony Corp., Panasonic Consumer Electronics and Samsung Electronics.
Consumer electronics sales plunged 5.7 per cent in the Thanksgiving to Christmas period last year from the 2007 holiday season, according to NPD figures. The data excluded cellphone and video game sales as well as sales at retailer Wal-Mart Stores Inc.
Other consumer electronics companies have also felt the pain. Harman International, whose Harman Kardon audio systems compete with Bose, last week said that it would be shutting down an operation in Woodbury, N.Y. Circuit City, which had been a major channel for Bose audio products, filed for bankruptcy protection last year, and, unable to find a buyer, is now shutting its stores and liquidating its assets.
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