Bake Or Break, Part 4: Layoffs At Dancing Deer

Over the past few months, we've been following one local business and its ups and downs in the current economy. Dancing Deer Baking Company is a private firm that employs more than 100 people in Boston and sells its goods nationally online and through stores.

The company recently expanded to new, larger facilities near Dedham and, like many Massachusetts retailers, the company pinned its hopes on high sales during the holiday season. It didn't pan out.

That left Dancing Deer with little choice but to layoff some workers.

A few months ago, Dancing Deer CEO Trish Karter said business would have to get bad before the company would consider layoffs. Well, it got bad.

TRISH KARTER: Yeah, because the gift market collapsed, essentially. So we didn't hit our holiday numbers.

The numbers were so low, Karter says missed sales evaporated a significant portion of the company's cash flow. But that wasn't all.

KARTER: We saw how bad things are, particularly in the gift space, which is half of our business. And said, wow, if it doesn't come back soon, we have the wrong overhead structure. So in order to rightsize the business in the market we're playing in now we really have to take some weight out of the overhead in order to really survive whatever, um, to survive it, whatever it is.

Karter gropes for the right words, because even though she occasionally falls back on business lingo — rightsize, overhead structure — she's talking about her 100-plus employees, and the day last month she had to let ten percent of them go.

KARTER: It was a very emotional day, and even as I'm describing it I'm having a hard time with it. Um, you know at some level, it's a reflection on my, you could call it my failure. I felt that way. Um, so I decided I would deliver the bad news.

First, the bakery staff lost hours. They were reduced to a three day work week. However, a state sponsored work-share program covers half their lost wages. The layoffs came on the professional side. Dancing Deer eliminated an entire layer of management, ten employees, some of whom had helped the company grow for the better part of a decade.

KARTER: The most important thing to me was that everyone put their energy on supporting the folks that had to leave, because they're leaving in order for the company to stay healthy.

DANIELLE O'CONNOR: It was somber. It was, uh, it was a tough day. Definitely.

Danielle O'Connor is Dancing Deer's assistant comptroller. One of her closest friends was among the layoffs.

O'CONNOR: It was interesting to watch the news on a daily basis and see some of the banks struggling and all of this. That day, I felt like I was in the economy rather than looking out at the world.

For accountant Terry McIssac, that's one of the hardest things about this economy. The way it muscles into businesses, elbowing aside employees, leaving a lot of empty desks behind.

TERRY McISSAC: Simply not having people you were working with, sitting next to you, or looking out and not seeing all the seats filled, just immediately that alone you do feel the impact of having people leave. So, it's... it's sad.

Sad, but not hopeless. CEO Trish Karter says she worked hard to make sure Dancing Deer's remaining employees understood why the restructuring was necessary. The company feels more focused now says Jason Wood. He's Dancing Deer's wholesale coordinator and shipping manager.

JASON WOOD: Morale, I believe, is on an upswing. You know we have some plans in place, and I think we're headed in a newer direction and a better direction for the company, and only better things to come.

KARTER: It's odd, but I feel almost better about the company right now, because we're so disciplined.

It's the silver lining to the layoffs, Trish Karter says, because for a company that had undergone a ten year period of sustained growth, a correction was inevitable. Karter believes the current economy forced the company to mature out of the chaos of a start-up and into efforts aimed at longterm profitability.

KARTER: And, so, this was a stimulus yes, to change the cost structure first. And it wouldn't have been necessary to take that step if we weren't in this economy. But, in the context of that, I think we're doing all the right things.

And doing the right thing has always been a core value at Dancing Deer, Karter says. She readily admits there were ways to avoid the layoffs. She could have raised more capital. But capital, especially in a crisis, comes with strings attached she says. Dancing Deer would have been asked to use cheaper, artificial ingredients, reduce employee benefits, or eliminate socially progressive programs that she says are key to the company's mission. So to Karter, the layoffs weren't just about saving the company. They were about preserving a company worth saving at all.