A local recruiting and staffing firm is laying off 319 of its employees who work on a contract basis in Durham for LED lighting company Cree.
Raleigh-based Greene Resources disclosed the layoffs to the state Department of Commerce last week and reported that the affected employees were “a contingent workforce” for its client, Cree.
“As a recruiting firm who does not participate in our client’s business decisions, the headcount reduction within our client’s business was an unforeseeable circumstance,” Mikio Anderson, Greene’s vice president of human resources, wrote to the state agency.
“The headcount reduction,” Anderson added, “is due to our client making changes to their business operations. Specifically, an older version of a product has become obsolete and will no longer be produced. A new version of the product will be produced at a facility located outside of the United States.”
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The affected employees work at Cree’s manufacturing facility at 3871 S. Alston Avenue, which makes LED bulb products.
Cree makes the nation’s best-selling LED light bulbs, plus indoor and outdoor light fixtures and components that other companies use in LED lights. Its LEDs also illuminate mobile phones, televisions, electric signs and car dashboards.
“We have contract assignments that start and end all the time,” Greene Resources CEO Gary Greene said in an interview. “It’s common for companies to use a contract workforce to better manage fluctuations in their staffing needs.”
“As usual, we are going to do everything we can do to get these people working in other positions as quickly as possible,” Greene added. “This isn’t the end of the story.”
Greene Resources has a core of more than 50 employees who operate the recruiting and staffing business and oversee 1,900 contract workers.
“Those are temporary positions,” Greene said of the contract workers. “The numbers fluctuate.”
Cree issued a statement about the layoffs that noted its “contract workforce has historically fluctuated to match our business needs. Our Cree employee base remains solid and continues to grow.”
The company also noted that “the employees affected by these adjustments are temporary employees, and are not Cree employees.”
Cree also said that it typically handles “initial product design, development and early production in-house,” then as volume ramps up “we utilize our contract manufacturing partners as appropriate to increase efficiency. We are leveraging our existing contract manufacturing partners who have operations in North America and overseas.”
Cree said the strategy is not new and that it will continue to use contract manufacturing partners “as appropriate.” The statement concluded: “The high-value functions remain in Durham.”
Cree has more than 6,800 employees worldwide, including more than 2,600 locally. Those numbers do not include contract workers.
Greene Resources reported that 287 of the affected employees would be laid off Feb. 2, with the remainder scheduled to be laid off March 1.
Last week Cree ended a string of three consecutive disappointing quarters, reporting better-than-expected results for its fiscal second quarter.
Revenue for the quarter that ended Dec. 28 totaled $413.2 million, down marginally from $415.1 million a year ago but ahead of the $412.3 million projected by analysts. Net income after adjustments for the quarter was $37.9 million, or 33 cents per share, down 33 percent from a year ago but well ahead of the 22 cents per share analysts expected.