Pelco plans furloughs for 2,000 employees

Pelco, one of the San Joaquin Valley’s largest employers, will furlough about 2,000 of its workers for two weeks this summer.

Company officials blame a worldwide recession for creating a backlog of unsold Pelco-made video surveillance and security equipment.

“We have more inventory on hand than we really need at this moment,” said Joe Olmstead, Pelco’s director of marketing and communications. “So we need to make adjustments.”

Pelco, like many other U.S. companies, has tightened its belt and made cuts to its operation over the past two years. It has eliminated 36 jobs, sold the company jet, scaled back on trade shows and frozen salaries.

The unpaid furloughs will affect employees throughout Pelco’s facilities, including those in Clovis; Orangeburg, N.Y.; Fort Collins, Colo.; and Pleasanton, Olmstead said.

Most of Pelco’s employees work out of the Clovis factory, and their furloughs will be staggered over the next three months.

“We are hoping to get through this summer in good shape,” Olmstead said.

Pelco’s sales softened in the first quarter of the year as its customers put projects on hold during the recession.

Pelco was not the only company that didn’t meet performance expectations, said Scott Goldfine, editor-in-chief of Torrance-based industry magazine Security Sales & Integration.

“In good times and bad times, you still need security, but it still doesn’t mean these companies are impervious to what is going on in the economy,” Goldfine said. He said Pelco still seems to be experiencing growing pains as a result of being acquired by France-based Schneider Electric nearly two years ago.

Part of the slowdown in the industry may be caused by a lag in purchases, said Steve Hunt, a security industry analyst and chief executive officer of Illinois-based Hunt Business Intelligence.

“Things that used to take three weeks take three months, and the things that once took three months take nine months,” Hunt said.

And vendors, he said, are not seeing their products moving off the shelves.

As for Pelco, he said, the company ran an expensive operation for the past 20 years. “It looks like they are continuing to cut costs and streamline their product line,” Hunt said.

“I believe we will see them becoming a more lean and agile company. The idea of becoming more lean and agile during a recession is nothing new.”

Along with the furloughs, Olmstead said, the company is encouraging employees to use their accrued vacation.

“We are doing a combination of cost-saving measures that will put Pelco in a better position and make it a stronger company,” Olmstead said. “We still have a good reputation in the industry, and that has not changed.”