The Northfield-based sock-maker Darn Tough Vermont is eliminating nearly 50 jobs as it retrenches after a prolonged partial closure this year.
The company notified employees of the job cuts in a letter mailed June 19 and told customers in a Facebook Post June 22.
“We’re not a public company, we don’t answer to shareholders – we answer to each other. Not sure if one is easier than the other, we just know our way,” the company said in the Facebook post, adding that the company had been hurt by the mandatory shutdown. “Today we had to let go of just under 50 people. A few months ago we couldn’t grow fast enough. There are larger problems in the world, and we get that. It’s always about people though, and compassion.”
Before the job cuts, Darn Tough employed about 330 people at its headquarters and traditional manufacturing center in Northfield, and at the offices and manufacturing operation that it opened this spring in Waterbury.
The company stopped nearly all of its manufacturing operations in mid-March as the governor declared a state of emergency and ordered non-essential manufacturers to close. Because Darn Tough makes socks for the military and law enforcement, the company was determined to be essential.
The company sent home its manufacturing workforce with full pay and benefits on March 17 as Gov. Phil Scott ordered the closure of schools and businesses to prevent the spread of Covid-19. About 80 people were able to work remotely for the company; another 250 manufacturing employees received pay for a month before they were furloughed so they could apply for unemployment insurance. Darn Tough continued health insurance and other benefits for those workers.
While it has now brought back about half of its workforce and to continue making socks, Darn Tough won’t meet its financial projections for 2020. And “it’s becoming clear that this is a long-term event,” said marketing director Brooke Kaplan on June 22 of the financial crisis.
Sales of Darn Tough socks have been hurt by the prolonged shutdown of the retail sector. Darn Tough also fulfills online orders from Waterbury.
“To make sure we’re best situated to navigate what seems to be a prolonged period of economic recovery, effective today we’re separating permanently from about 15% of our workforce,” Kaplan said in an interview. “These are our friends and colleagues.”
Vermont and other U.S. states have suffered historic job losses as a result of the sweeping business closures put into place to suppress the spread of Covid-19. At the peak of the unemployment crisis, 90,000 Vermonters had filed for unemployment insurance.
On June 19, the Vermont Department of Labor reported that the state’s unemployment rate had fallen to 12.7% in May, down from 16.5% in April. The national rate is 13.3%. At the same time last year, the unemployment rate in Vermont was 2.2%.
Vermont employers added 15,700 workers in May as the Covid-19 infection rate remained relatively stable and state officials opened up more sectors of business. And Vermont’s employment growth in May was 6.4%, the fastest in the nation. But the state still has 55,000 fewer jobs than in May 2019.
Job losses are concentrated in the restaurant and bar industry, which closed early and has only been able to open up on a limited basis. That sector and employment at lodging establishments – also still operating under many restrictions – show a 60% decline in employment compared to last year.
Manufacturing is only down 3,800 jobs, according to the DOL. Along with construction, the sectors only represent 15% of the employment decline from 2019 to 2020, according to the DOL.
Kaplan said it seems as though retail is starting to recover, and orders are starting to rise.
“We have new product launches coming out, what we are trying to do is be responsible in terms of building a product with the timing we need, versus overbuilding too early,” she said. “Nobody wants to have a bunch of inventory that is waiting to ship and the demand is not quite there yet.”
She added that the company posted the news about the job losses on Facebook in order to stay in keeping with Darn Tough’s overall values.
“This is our family that we deeply respect, and we don’t shy away when things are challenging,” she said. “We own our actions, and live by being honest and straightforward. We value our community and are committed to compassion.”
Darn Tough has a strong and loyal fan base, and the dozens of comments posted on Facebook were supportive.
“Just for that I am going to go check your socks out and order some,” said one. “If we want to keep things like this from happening we need to put our money where our mouth is!”
“I trust you’ll do your best to bring them back when you can,” said another of the workers.
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