Dixie Group Making Employee Cuts

Chattanooga, TN, April 30, 2008--Dixie Group is cutting up to 8 percent of its employees as the depressed housing market continues to drag down carpet sales.

The belt-tightening by Dixie Group, based in Chattanooga, Tenn., will affect the 800 workers at Masland facilities in Saraland and Atmore, Ala., as well as Dixie's other 600 employees.

The announcement came Tuesday as the company barely turned a profit.

"We are going through a very difficult period as an industry," Chairman and Chief Executive Daniel Frierson said in a conference call with analysts. "We are trying to address that internally with reductions. Obviously, if things get worse, we will work harder at that and look at additional cuts."

Frierson said the company would delay salary increases, not refill vacant positions and lay off workers, but said Dixie would not cut sales staff. Chief Financial Officer Gary Harmon said the layoff total wasn't yet clear.

The cutbacks are expected to save Dixie a "significant" amount of money, but less than $20 million a year, Frierson said. Though factories are running at far less than capacity, Frierson reiterated that the company doesn't expect to close any plants.

Dixie reported a $13,000 profit for 2008's first three months, down 92 percent from the same period a year ago.

Related Topics:Masland Carpets & Rugs, The Dixie Group