From: Shirley Schmidt
Subject: A Message from Shirley -- Difficult Decisions
Release Date: 9 March 2014
As you well know, these are very challenging times for everyone at Bright Wave Technology. We are working hard to navigate both a deteriorating global economy and the restructuring of our business. And we do so with the ever-present priority to preserve the culture, guiding principles and employee security of our company.
Our revenues were down 6% from a year ago, driven primarily by a 9% decline in same-store sales. Companies across the country have reported negative comparable revenues as high as 30%, in the midst of declining consumer confidence to levels not seen in 40 years. The forecast by experts suggests the economic situation will get worse before it gets better.
We have also made some progress in containing costs and improving operations in our company. For this I thank all of you for the sacrifices, discipline and effort you are making each and every day. But we have more to do, and we must act with decisiveness in order to make Bright Wave Technology even more relevant in an increasingly worsening economical environment.
The leadership team and I have gone line-by-line to reduce costs while considering every decision through the prism of our values and culture. Offering comprehensive benefits -- including health care and equity in the form of stock options -- are at the core of our company and have taken priority over certain other benefits. We will continue to offer health care coverage and Bright Wave Technology stocks to partners, and we are seeking shareholder approval to amend our equity incentive plans to allow eligible partners a one-time opportunity to exchange certain outstanding underwater stock options for a lesser amount of new options with lower exercise prices.
All told, we plan to invest more in total partner benefits and stock compensation this year. While we fulfilled millions to our U.S. 401(k) savings plan for 2014, we have determined it should be discretionary in 2015. And, in order to focus on the benefits that provide the most value to the greatest number of partners, we are revising our paid time-off policy for all retail hourly partners, revising our Stock Investment Plan (S.I.P.) and expanding our commuter benefits program.
We are also making difficult decisions that will impact some of our partners' lives, and we are establishing our “Workforce Re-shaping Strategy”. Moving forward we will be unable to maintain our workforce as it is currently organized. As part of today's announcement we indicated that there will be layoffs. Approximately 5% of our partners will be separated from the company; with about 7% at the Bright Wave Technology Support Center. All of this has required us to aggressively re-shape our workforce numbers. These were some tough decisions that needed to be made to ensure our remaining workforce has the security they have earned. Moving into this new stage for Bright Wave Technology, it has been proven these decisions were not easy, but with the goal of guaranteeing a smooth transition and to mitigate future economical challenges. Partners who are displaced will be offered severance packages based on job level and/or years of service.
These decisions have been made to ensure the company is leaner and prepared to endure a worsening economic climate. I can assure you the management team is aware of the impact of these steps on the organization -- both those who will depart and those who stay. For those of you who will be departing the company, I thank you for your contributions to Bright Wave Technology and wish you and your families the best during this difficult time.
In the last few weeks we have seen countless companies announce layoffs and some bankruptcies. I point this out to try and put in context that the financial crisis is affecting almost every company around the world. The decisions we