Sleep Number has furloughed 40% of its 4,400 employees and reduced hours for 30% more as it closed stores and suspended most home delivery during the COVID-19 epidemic.
The Minneapolis-based company is among the first of Minnesota’s public companies to announce mass furloughs as several firms deal with the economic fallout of the coronavirus.
Some Sleep Number employees in South Carolina are working in partnership with the South Carolina Hospital Association to make N95 surgical masks, the company said Thursday. Their operations are being funded by the association.
In addition, the mattress maker and retailer also is temporarily suspending matching 401(K) contributions and some other benefits, and the company’s leadership team and board are taking a pay cut in exchange for restricted stock awards.
President and CEO Shelly Ibach will not receive cash compensation for the remainder of the year, deferring half of it and taking the other half in restricted stock.
These actions were on top of drawing the $262 million remaining on a $450 million revolving credit facility, expanding other credit options, halting share buybacks and negotiating rent abatements.
“In response to the potential impact of COVID-19, we immediately preserved financial flexibility and accessed significant liquidity with the support of our banks,” Ibach said in a news release. “Additionally, we continue to implement substantial cost-saving actions across the business, including making difficult and heartbreaking decisions that impact the soul of our company — our people.”
The company is trying to preserve some sales by enhancing its online sales site and remote customer-service capabilities.
Sleep Number made the announcement after the stock market had closed. On Wednesday, its shares closed at $26.20, up $5.47 per share, and on Thursday they closed at $26.57. The company’s shares are down 47% year-to-date.
The company will announce its first-quarter results April 22.