MillerKnoll Inc. will permanently lay off 162 employees as the company prepares to close a furniture manufacturing plant in Sheboygan, Wis.
According to a recent Worker Adjustment and Retraining Notification (WARN) Act filing with the state of Wisconsin, the Zeeland-based furniture manufacturer will cease operations over the coming months at the plant located at 2218 Julson Court in Sheboygan, about 50 miles north of Milwaukee.
The plant currently has 124 union and 38 non-union employees. Company officials anticipate the layoffs will begin between May 23 and June 5, and conclude no later than Sept. 29 of this year.
Kris Marubio, vice president of communications at MillerKnoll, said in an emailed statement that the decision to close the plant was made to help the company better align its resources.
“We made the decision to consolidate some production and move health care from our Sheboygan facility into other MillerKnoll locations in the U.S. that have capacity to absorb this work,” Marubio said.
Marubio added that the company is currently “bargaining the closure effects” with labor unions in an attempt to reach an agreement.
“We are enormously proud of our associates’ dedication and are committed to fairly supporting them,” Marubio said.
The Sheboygan plant originally served as a facility for Nemschoff Inc., a Wisconsin-based manufacturer of health care furnishings. Herman Miller Inc. acquired Nemschoff in 2009, and purchased the Sheboygan plant in 2011 for $63 million, according to a report in Insight Publications.
MillerKnoll formed in 2021 under the $1.8 billion blockbuster merger of Herman Miller and Knoll Inc.
The plant closure involving MillerKnoll’s health care furnishings segment comes as the company grapples with ongoing challenges in the office furniture industry with continued return-to-office uncertainty.
The company recently reported $987.4 million in sales for the third quarter of its 2023 fiscal year, indicating a 4.4-percent decline from a year ago.
“During the past few months, general economic uncertainty, and the impact of rising interest rates, have weighed on business and consumer sentiment levels,” CFO Jeff Stutz said during a recent quarterly earnings call. “The result has been slowing demand patterns and further delays in customer return-to-office timelines.”
In the current fourth quarter, MillerKnoll expects sales to decline to $930 million to $970 million compared to the $1.1 billion recorded for the same period a year ago.