Oakley Lays Off More Than 100 as Demand Slips

Oakley Inc. has laid off more than 100 manufacturing plant employees in recent weeks because of weaker-than-expected demand for its pricey sunglasses, the company said Tuesday.

Layoffs in the company’s Irvine plant reduced Oakley’s full-time employment total to 580, down from 700 a year ago, said Oakley Executive Vice President Link Newcomb.

Newcomb tied layoffs to inventory levels that soared in recent months after Sunglass Hut, the company’s single largest customer, canceled scheduled orders prior to the holiday shopping season.

Newcomb said that Oakley traditionally has laid off employees during the winter months, when demand for eye wear slows. But this year, Newcomb said, layoffs cut deeper than in past years.

“In light of some of the things that have occurred in the last six months or so with Sunglass Hut, the seasonal difference in our business has been a little bit aggravated this year,” Newcomb said. “But we have tried to minimize the impact on full-time employees.”

The layoffs came several months after Oakley laid off hundreds of temporary workers who normally join the company during the second and third quarters, when demand for Oakley’s stylish eye wear soars. Temporary workers typically are let go during the third and fourth quarters, Newcomb said.

Newcomb said that some of the full-time employees were laid off because Oakley is shifting production to a new, more efficient manufacturing plant and headquarters complex in Foothill Ranch.

Newcomb said Oakley hopes to begin hiring again during the second and third quarters.

Earlier this month, Oakley began shipping its new X Metal line of $250 sunglasses that, company executives say, will help reignite demand for the company’s products. Oakley founder and Chairman Jim Jannard passed on collecting a $1-million bonus for meeting a self-imposed shipping deadline, however.

Last year’s order cancellation by Sunglass Hut, one of the nation’s leading eye wear retailers, prompted investors to hammer Oakley’s stock. During the last quarter of 1996, the shares tumbled to below $10 after reaching a high of $27.1875 in May.

Oakley fell by 12.5 cents on Tuesday to $9.875 in New York Stock Exchange trading.