Market Basket store managers will eliminate hours for about 20,000 part-time employees, who represent about 80 percent of the company’s work force beginning next week.
The move is an effort to adhere to a directive from one of the chief executives, who sent an email ordering that they get payroll expenditures in line with current sales. Store sales have plummeted by as much as 90 percent as the chain remains embroiled in an 18-day employee- and customer-led boycott.
Numerous store managers said Thursday they will have to cut all hours for their part-time workers, who make up more than three-quarters of their total staff. Full-time employees are not affected yet, but managers said that could change in the coming weeks as the boycott saps millions of dollars in revenue per day from the 71-store supermarket chain.
News of the cuts came one day after the conclusion of a three-day job fair the company held in Andover, advertising for store manager and key corporate positions.
Stores company-wide are making the same move, managers said, meaning about 80 percent of the company’s workforce will be out of work next week; low-wage casualties in a battle for control of the family-owned supermarket chain that brought in an estimated $4.6 billion in revenue last year.
Market Basket said through a spokesman Thursday it did not direct any store managers to lay off employees. The company argued that the reduction in hours, which it said was a store-level decision, is not a layoff because the part-timers are still employees of Demoulas Super Markets.
Demoulas Super Markets is the parent company of Market Basket. Store managers are responsible for scheduling decisions, the company said.
Store managers said Thursday they were following an order co-chief executive Felicia Thornton sent out by email Aug. 1. The email directed them to schedule according to current sales volume, which has nearly dried up during a warehouse and truck driver work stoppage that has left produce, meat and dairy shelves empty.
New Hampshire Gov. Maggie Hassan, a Democrat running for re-election this year, called the reduction in hours “troubling” and urged the company’s leadership to reach a “construction resolution.”
Massachusetts Gov. Deval Patrick’s office Thursday issued a transcript of comments he made Wednesday about a potential layoff, in which he said he “doesn’t want to see that happen.”
Meanwhile, the Massachusetts Attorney General’s office set up a hotline, 617-963-2400, specifically for affected Market Basket employees to call. The office also established a web site which provides answers to the most frequent questions: http://www.mass.gov/ago/doing-business-in-massachusetts/labor-laws-and-public-construction/info-for-market-basket-employees.html
New Hampshire Attorney General Joseph Foster’s office said it does not handle employment issues and asked New Hampshire residents to contact New Hampshire Employment Security at 603-223-6126.
Sad and frustrated
Store managers expressed frustration and sadness as they spread the news to workers.
“Obviously we scrambled last week to adjust and clearly it still wasn’t enough,” said Stephanie Schwechheimer, manager of the Market Basket on Water Street in Haverhill. “Going forward we are going to be trimming our part-time hours down to zero for next week.”
Schwechheimer said she has 95 part-time employees out of a total of 120.
Joe Amaral, manager of the Market Basket on Route 114 in North Andover, said with a cracking voice he would be meeting with his roughly 300 part-time employees throughout the day Thursday.
“We’re following the CEO’s original directive about staffing the store,” Amaral said. “(Thornton) wants us to schedule according to our current business levels. In order to do that, I have to lay off my entire part-time work force, which is about 300 people.”
Amaral said he has about 360 total employees. He said his part-timers work anywhere from 20 to 32 hours a week. The store average is about 25 hours.
Mike King, the controller of Market Basket who was protesting outside headquarters Thursday morning, said of the roughly 25,000 employees in the company, about 20,000 of them work part-time.
The company, through a spokesman, said Thursday that no one directed store managers to to lay off any employees.
“Standard company practice is that store directors are responsible for determining appropriate staffing levels in their stores,” the company said. “Store directors were not instructed to lay off associates, but to adjust hours to meet current demand. It is our hope that we will be back to normal business levels in the not too distant future and all associates will be back to a full schedule.”
Thornton, co-chief executive of Market Basket, said in a statement Thursday she directed store managers to tell their employees they are not laid off.
“All store directors are to let their associates know that they are not laid off,” she said. “All store directors as part of their normal responsibilities are able to and often do reduce hours but they need to make clear when doing so that the individuals are still employees of DSM.”
However, Massachusetts state law defines a layoff as “a temporary discontinuance of employment for lack of work or lack of money” in Chapter 31, which governs civil service.
“If an employer has no work for its employees, then, all else being equal, those employees are in unemployment and may, if otherwise eligible, be entitled to unemployment benefits,” Ann Dufresne, a spokeswoman for the state Department of Unemployment Assistance, said.
In Londonderry, which employs 550 to 600 people, some 470 part-time workers will lose their hours as of Sunday, assistant store manager Jim Theriault said.
“Most have heard. They’ll come in today to get their checks and we’ll give them a letter,” he said.
Jameson Reed, a meat department clerk in Londonderry whose hours already had been cut from 32 a week to 10 or 11, on Thursday stood in front of the store entrance with a sign: “No more hours.”
“I’ll have none as of Sunday,” he said.
With a 7-month-old son, the news was devastating, he said.
“It’s the loss of everything,” Jameson said. “I want to work. I love my job.”
Haverhill resident Daniel Jarvis works as a cashier and bagger at the Water Street store and said he was “shocked” to hear the news.
“I didn’t think it was going to happen this soon,” he said.
The last shift he worked was on Tuesday and this job provides him with his main source of income.
“I have worked for Market Basket for 13 years and this is the first time I was laid off,” Jarvis said. “We need Artie T. to come back soon so we can go back to normal.”
Governors differ in approach
Gov. Patrick, a Democrat who is not seeking a third term in office this year, has said the employee and customer protests, and the Demoulas family feud, is a private matter. He said Wednesday he is concerned about people losing hours or benefits, “but governors don’t have power to go and say, ‘I want this CEO rather than (that) one to run a private company.’ That’s my whole point.”
Gov. Hassan urged the company’s shareholders to reach an agreement to end the turmoil.
“While this may be a private business dispute, it is having a significant financial impact on New Hampshire – on our families, consumers, farmers and other vendors – and it will create new costs for the state’s Unemployment Trust Fund,” she said in a statement. “I continue to urge Market Basket leadership to listen to the concerns of their employees and customers and reach a constructive resolution in order to keep these dedicated workers employed and reduce the impact on consumers.”
Her office estimated out of about 9,500 Market Basket employees in New Hampshire, about 8,000 are part-time workers.
“The reports about these reductions in hours are incredibly troubling, as many of these dedicated employees have been showing up for work and clearly value the company’s past, present and future,” she said.
Massachusetts Attorney General Martha Coakley’s office said in a statement Market Basket employees should call her office with any potential labor law violations. It established the hotline “due to the evolving circumstances and with a significant uptick in calls from Market Basket employees over the past 24 hours.”
Coakley and Foster warned the company on July 31 to follow both states’ worker protection laws.
Several Market Basket store managers have said their sales dropped more than 90 percent as employees protest the ouster of former CEO Arthur T. Demoulas and urge the boycott to pressure the family to sell to Demoulas.
Warehouse workers and drivers almost totally have stopped going to work, leaving the three company warehouses without anyone to unload perishable and dry goods and no one to distribute what remains to the stores.
The company hired some replacement workers, but managers have said their product orders to headquarters are going unfilled.
This week’s job fair was sparsely attended, though the company set up an email address for job seekers to apply and send resumes.
Arthur T. Demoulas has made an offer to buy the 50.5 percent of Demoulas Super Markets owned by his rival and cousin Arthur S. Demoulas. The company’s board of directors has said it is considering Arthur T.’s offers among others. The amount of the offer has not been disclosed.
Staff writers Jo-Anne MacKenzie and Sara Brown contributed to this report.
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WHAT’S GOING ON?
■ Store sales at Market Basket have plummeted up to 90 percent as a worker-fueled boycott has spanned 18 days.
■ The workers are pushing for the return of CEO Arthur T. Demoulas, who was fired by the board of directors but greatly loved by employees.
■ Arthur T. Demoulas made an offer to buy the 50.5 percent of Demoulas Super Markets owned by his rival and cousin Arthur S. Demoulas.
■ The company’s board of directors said it is considering Arthur T.’s offers and others.
■ The 71-store chain brought in an estimated $4.6 billion in revenue last year.
■ Sales have been down as much as 90 percent during the boycott.
■ Co-Chief Executive Felicia Thornton sent out an email Aug. 1, ordering managers to get payroll spending in line with current sales.
■ To do so, managers are eliminating hours for part-time workers.
■ About 25,000 employees work for the chain.
■ About 20,000 work part-time.
■ Thornton directed managers to tell their employees they are not laid off, though most managers will cut part-timers to zero hours.
■ Massachusetts state law defines a layoff as “a temporary discontinuance of employment for lack of work or lack of money.”