VIRGINIA BEACH, Va. (WAVY) – STIHL Inc., best known for its popular chainsaws, is furloughing about 30% of its Virginia Beach workforce, roughly 550 to 600 workers.
Spokesperson Stephanie Friess confirmed the news on Thursday, saying the company made the decision due to “softening market conditions.”
“The duration of said furloughs will respond directly to anticipated improvements in the market. We are committed to supporting our affected employees during this time and will work tirelessly to return all employees to normal work status as soon as possible,” said Friess, who had no comment on follow-up questions from WAVY.
The news comes less than a year after Stihl Inc. announced a $49 million investment to expand operations at the Virginia Beach plant. The Stihl parent company also reported a record in revenue in 2022 with $5.97 billion.
Employees who’ve been furloughed and wanted to remain anonymous told 10 On Your Side Thursday their schedules had recently been reduced to only four days a week, and they were getting the sense that “we’re making too much product and we have too many people in the building”.
They added that the Virginia Beach facility – the US headquarters for the company based near Stuttgart, Germany – has had three presidents in the past three years and five in the past decade.
The workers said Stihl’s business ramped up during the pandemic, as more people were at home and focused on home improvement and landscaping projects. But as people returned to work, production targets remained at the higher levels, creating a backlog of inventory.
Bob McNab, Chair of the Department of Economics and the Director of the Dragas Center for Economic Analysis at Old Dominion University, told 10 On Your Side the company’s action could be in response to a slower housing market that has resulted from the highest mortgage rates in about 20 years.
The furloughs affect several product lines but notably spared was the department that makes battery-powered items. At the company’s earnings report in April, CEO Michael Traub said he wanted 80% of Stihl’s product line to be battery-powered by 2035.
Workers at the plant on Viking Drive across from Lynnhaven Mall were suddenly sent home around noon on Wednesday and told to return on Monday. All employees, furloughed or not, were told to leave and will be paid for Thursday and Friday, an employee who was furloughed told WAVY.
The employee said those who are furloughed will get two weeks’ pay, and the furloughs are expected to last anywhere from four to 16 weeks.
Stihl Inc. opened in Virginia Beach in 1974, and employs about 2,100 employees and supplies more than 10,000 local STIHL dealers, according to the company’s website.
They’re currently the third largest private employer in Virginia Beach, behind only Sentara and Geico, per Virginia Beach Economic Development. They’re also listed as one of the top 20 companies with 1,000-plus employees in the Hampton Roads region by the Hampton Roads Alliance.