Guitar Center Laid Off Corporate Employees, Leaked Email Shows

Gear Gods is reporting that there have been some recent layoffs at Guitar Center, not in “boots on the ground” positions in stores, but at a higher level in their corporate offices. The news comes in the form of a leaked email from new CEO Darrell Webb, who replaced former CEO Mike Pratt in November after the latter had held the position for just 20 months. Here’s the email:

After a comprehensive evaluation of our staffing levels, including a detailed benchmarking of staffing levels by function and department compared to similar size specialty retailers, Guitar Center’s leadership team made the difficult decision to reduce corporate and field supervision staff. The reduction included less than one percent of the overall workforce and consisted of reductions at the corporate offices in Westlake Village and field management positions. This action was designed to create a more effective and efficient organization and was based on functional area. Despite this reduction, we continue to actively recruit for a variety of positions in Westlake Village that are matched with the needs of our ongoing growth plans.

Guitar Center thanks these individuals for their dedicated service and we all wish them the best in their future endeavors.

There are no plans to reduce staff at our 260+ stores. Our customer base is strong and for them business will continue as usual. Our store opening and remodeling program continues, as does our ongoing dedication to the opportunities we offer musicians — unparalleled inventory and selection, clinics, lessons, repairs, our nationwide searches and competitions and unmatched service every day. In spite of how difficult these decisions were to make, and the challenges that these reductions present to some of our dedicated associates, this restructuring was made to put us in a more positive position to serve our customers and vendors.

Laying off 40 people might not seem like much, but comparing that number to the company’s overall staff — including retail positions — and claiming it comprises “less than 1%” seems a bit unfair. For a more apples-to-apples comparison they should divide 40 by the total number of GC corporate employees, which unfortunately is a number we do not have.

While “Big Company Lays Off Some Staff” isn’t especially newsworthy on its own, GG writer Max Frank brings to our attention some other troubling facts about Guitar Center’s recent history that paint these layoffs as part of a very troubled overall financial picture and deep dysfunction at the company:

I want to say that this is startling news, but it’s actually business as usual given Guitar Center’s financial woes, it’s revolving door of executives, it’s troubles with employees that have led to unionisations, and more, over the last few years. The company is currently under investigation at the federal level by the Securities and Exchange Commission, one of our country’s top financial fraud regulators, and has also been accused of unfair labor practices by the Retail, Wholesale and Department Store Union. Not to mention they’ve not had the best relationship with the media, as several high-level employees, including, if you can believe it, their former CEO, have been caught blabbing about the company in the comments section of negative news articles.

Wowza; hopefully Guitar Center can get back on the right track of offending all people with ear drums very shortly. Read more analysis of the situation at Gear Gods.