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Some Thoughts on the SIG SAUER Staff Adjustments

I recently heard about layoffs of the work force at SIG SAUER‘s facility at the former Pease AFB in New Hampshire. The numbers were very high and I was a bit concerned. I contacted SIG to see if it was true and they sent me the statement you see below. You’ll notice that they refer to the action as a “Staff Adjustment”. While many will write this off to bureaucratese, I’ve taken some time since receiving the statement last night to consider it, as well as what I know about the manufacturing business.

To start with, while SIG did not discuss the numbers with me, I am certain that the high percentages reported and then deleted by another website are untrue. I was there a few weeks ago and the loss of that many positions at once doesn’t add up. Additionally, the deletion of the story from the website that initiated the story tells me that they were way off. In fact, it was that deletion that got me looking into the issue in the first place.

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By no means am I trivializing the issue. To be sure, these are jobs we are talking about and their loss, if even temporary, affects those workers and their families. But, as a manufacturer you don’t want to pay people for work that you don’t need. In the case of SIG (and other gun makers) you don’t want to pay people to build guns you aren’t selling. Anyone who works in manufacturing will tell you that they’ve seen a layoff or three. It’s part of doing business. To do otherwise puts the entire enterprise at risk.

The genesis of these manufacturing positions was panic buying. To meet the increased firearms demand after the Obama Administration’s call for firearms restrictions in response to the Newtown shooting in December, 2012, SIG hired additional workers. They also moved down the road into a new facility. But, those demands have changed and along with them, SIG is adapting.

SIG SAUER® Announces Work Force Adjustments

NEWINGTON, N.H. (July 10, 2014) — SIG SAUER® has instituted a series of work force adjustments to adapt to ever-changing market conditions and manufacturing efficiencies.

The firearms market has begun to cool from the record highs experienced over the past couple of years. Additional resources, including new employees, were brought on to help meet this spike in demand. Now that sales have began to return to normal, an adjustment in staff numbers is needed to maintain an efficient and cost-effective workflow.

Additionally, enhanced productivity and efficiency at the company’s new Newington, New Hampshire, manufacturing facility has made certain positions redundant or no longer needed. In order to maintain quality and control costs, an adjustment in staffing levels is required.

These difficult, but necessary, measures will allow SIG SAUER to continue to deliver innovative, high-quality firearms to its customers. As SIG SAUER continues to grow into new business categories, including ammunition and accessory products, these market-driven decisions will play a significant role.

Become a fan of SIG SAUER on Facebook at www.facebook.com/sigsauerinc.

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Just walk into your local gun store and you can see that the demand for firearms has slowed down since the Newtown shootings. Once bare shelves are now bristling with a wide variety of offerings. I’d say that sales are still up over 2012 levels, but they aren’t anywhere near what they were last year, in 2013. That’s across the board, not just with SIG. SIG SAUER is a privately held company and not a conglomeration of share holders. Also, they aren’t fixated on the next quarter’s earnings. I doubt anyone walked in one morning and said, “Ok, let them go.” Rather, they took a look along view (forward and backwards) at the market and where it was going. The last thing you want to do is lay people off, lower capacity and then have missed the cues for another surge in demand. It’s hard to make money if you don’t have anything to sell. It’s why SIG hired on extra workers, to meet demand, and conversely, when that demand has slowed, they’ve adjusted their staff to meet that new reality.

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I don’t believe that the SIG layoffs are due to low quality or poor products but rather an overall drop in demand for firearms after a record breaking year. I visited SIG in June and President Ron Cohen told an assembled group of gun bloggers that SIG was going to move production of additional handgun models to the US from Europe, next year. Between that and the introduction of the MPX and MCX along with new suppressor designs, I’d say that some of those folks who were laid off will end up returning to work. To me, that’s promising. Many walked in the door knowing that their jobs were temporary. Hopefully, at least some of them will see additional employment with SIG in the future.

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16 Responses to “Some Thoughts on the SIG SAUER Staff Adjustments”

  1. Invictus says:

    My God, I just realized how rare a researched, nuanced, intelligent news article without an agenda is. Nice work.

    Best of luck to those displaced by this.

  2. Hardchawger says:

    It was announced today that Microsoft will lay off about 18,000 people. Who ever thinks that a recovery has been happening for some time (with those fixed unemployment numbers), is drinking that liberal kool-aid.

    We need to start voting out the “regulars” in office.

    • Bullet Tooth Tony says:

      Did you see the part about how most of them were ex-Nokia employees, of which Microsoft just bought, and there was a lot of overlap with them at Microsoft? Yeah, reading comprehension is important

      • z0phi3l says:

        Overlap in what? Nokia makes physical things, MS doesn’t, and you can’t say it’s extra management staff, that’s ridiculous, no MS got what they wanted patents and are more than happy gutting and disposing of the remains

        • Mike says:

          MS doesn’t make physical things? My son and his X-box are a little surprised to hear that. As are the mouse and keyboard on my desk. Or Surface tablets, although I don’t own one. Microsoft has been making things for more than 20 years. Acquiring a phone manufacturer isn’t a huge stretch for them. And acquisitions are followed by layoffs.

  3. zach says:

    All 3 of my Sig rifles had to be sent back to get work done eventually. None of them were over 1500 rounds and the last of them still doesn’t have a bolt catch that works after being “fixed.” They are not worthy of having the Sig name attached to them.

    • SSD says:

      I’m kind of curious. What does that have to do with the article? Could you tie it together for me? And while you’re at it. Could you explain why you purchased gun after gun from the same company that you claim builds an inferior product?

      • zach says:

        Article mentions quality. I am saying my experience tells me it is poor. People think of them as some amazing company and they are not. Many are probably realizing they are not. Article is about Sig and shows photos of rifles. First one had minor grip and sight rail issues. Gave benefit of doubt for second on said panic buy. Didn’t shoot 2nd and limited addition came out so I bought it. It crushed rounds completely upon chambering. Yes I buy things based on looks partially as very few will admit to doing. Nothing else piston has Sig beauty. My early comments are totally in line and “tie in.”

        • Airborne_fister says:

          I carried a 226 in a Afghanistan. I hate to say it but I cleaned it once. I know bad on me. But I was out on a mountain top to much to completely break it down and do my job. But I never had a mis fire or mis feed. Only prob I ever had was It kept hitting the hood on my holster that I carrier around on the fob. Stupid Serpa pos. but it was better than carting around a drop leg or a drop holster or my rifle with a 320 under it. Also I now have a 229 scorpion and I love it. Granted not a rifle. But every sig item I have used or own is better built for job I use it for.

        • SSD says:

          Sounds like you bought some guns built at the old factory. What were they might I ask?

  4. tirod says:

    The early numbers weren’t that far out of order for a manufacturer. I experienced two similar “staff reductions,” the advantage was that I was let go early before the other 150 were.

    One was a defense contractor on the downside of contracts not being let after Iraq, the other was an automotive and industrial manufacturer who lost a truck line which would have normally rotated to another vendor 3 years earlier. It’s not different than the auto parts chains letting their private lable contract for filters out to another maker – my present employer has done that with it’s fourth in 8 years. Give their are 3500 locations and the numbers involved, the losing contract must be laying off quite a few every time.

    Sorry to say, it’s just business. It’s going on all the time, contracts come and go, demand comes and goes. That is why so few now want to work in production – in America, you can’t keep your job. Unlike the Japanese who adopted an American’s view of running the workplace and who keep their employees. W. Edwards Deming was listened to in Japan, and they used their lessons to beat us in the world market at anything they want.
    We ignored him. Still do. That is because the wrong people rise in the ranks of business because they can sell the short term solutions and build a career first, instead of a business that will outlast them.

    • SSD says:

      They were a bit out of order when you consider that SIG has only one factory and is still selling guns, and introducing new ones, not going out of business.

  5. ScottW says:

    On the other hand SIG will be opening a new facility in Beaverton, OR! So they will be hiring!

  6. Stefan S. says:

    Personally do not care for SIG. Prefer H&K.