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.

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.

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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.

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.