Netshops and unemployment benefits

Are you getting your unemployment benefits yet? If you're still unemployed due to the layoff, you should be by now - unless you had a huge vacation balance and got a larger severance package than I've heard of.

Someone emailed me about a discussion they had with a representative from the Nebraska Workforce Development office. I'm going to post the email because it goes into detail about the situation. (All names have been removed to protect the innocent.)

Apparently, severance pay for a number of Netshops employees was not reported accurately (whether by the individuals or by Netshops is unclear). This has resulted in some former Netshops employees being overpaid unemployment benefits. The adjudicator said that Netshops has been a nightmare to work with during this. The end result of this is that there are people who have been receiving benefits when they, apparently, were not entitled, and will have to pay whatever they have received back to the state.

The initial misunderstanding seems to have come from confusion regarding vacation pay and sick pay. The state differentiates between the two, and Netshops does not, so Workforce was unsure how to pay out benefits. Then, with the severance, the former employees were asked if they received anything, but Netshops was to provide the amount, and this wasn't done in a timely manner, according to workforce.
Workforce stated that they contacted Netshops numerous times in an attempt to clarify, but Netshops did not get back in a reasonable amount of time.

I certainly don't think that Netshops was intentionally trying to screw us over, but their slow response time to Workforce's inquiries amounts to the same thing, at least for some of those involved in the last round of layoffs.

Not sure, if you can use this in the blog or not, but my attempts to get any sort of accurate information from Workforce has been slowed by weeks by Netshops lack of timely response.

Is anyone else having this problem? Have any of you out there heard of similar issues with Workforce? Please let us know!! (As always, I won't post your info or your emails unless it's ok with you.)

Resources for employees laid off by Netshops

Here are a few resources:

Fired-layed off-downsized employees handbook

Gifts for laid off employees

Oh look. Dilios has been updating Netshops' Wiki entry... I wonder how long it will be before it gets changed back to accurately reflecting the 'multiple rounds of layoffs' Netshops has gone through...

Corporate accounting scandals

Why would ^ that be here....

Unemployed, underemployed or anxiously employed? Take a look at UnitedProfessionals.org

Oh, by the way, the job fair next week at the Holiday Inn Central - it is mostly for journalisim/news media professionals. The next job fair for the rest of us unemployed (or underemployed or anxiously employed - like most of Netshops workforce right now) is April 10th. Circle the date. Like I mentioned - some of you owe me drinks and I don't drink cheap liquor.

Hodgepodge of Netshops layoff related info today

A little fun for all you Netshoppers reading right now, because I know you aren't doing anything job related....

Take this quiz

Duluth News Tribune picks up on the impending layoffs.

Thralow employees offered jobs in Omaha
Jane Brissett Duluth News TribunePublished Friday, March 16, 2007

NetShops, the Omaha, Neb., company that that bought Web sites from Proctor-based Thralow Inc., has begun offering jobs in Omaha to employees of the local e-commerce firm. Those who aren’t hired will be given a severance package, said NetShops’ human resources director.

All operations from Proctor are moving to Omaha, said Dana Coonce, human
resources director at NetShops. Dan Thralow, who founded Thralow Inc. and now
works for NetShops, said that 35 of the 39 employees who work in Proctor elected
to go to Omaha at NetShops’ expense to see the headquarters and learn about the
company.

NetShops is just beginning to assess how many people it needs and to make offers to workers in Proctor, Coonce said. If Proctor employees aren’t hired to work in Omaha and aren’t retained by Thralow Inc., they will be cut from the payroll and given a severance package, she said. NetShops, which has more than $100 million in annual sales, bought 40 of Thralow Inc.’s Web sites — but not the company itself — in November. The sites include Binoculars.com, Telescopes.com, Peepers
.com and others.

Thralow said the company named for him will remain in Proctor at 9803 Westgate Boulevard in the JOBZ tax-free zone where the company’s warehouse building was recently completed. Thralow said he “can’t answer” what Thralow Inc. will do or how many people it will employ. “There will be a payroll,” he said.

Thralow said he has no plans to move to Omaha.

When the sale was announced, NetShops said it would keep all of Thralow Inc.’s employees. NetShops is a private firm that owned about 120 retail specialty sites — such as PatioUmbrellas.com, Hammocks.com and Dartboards.com — at the time of the acquisition. It was named Inc. magazine’s 13th fastest-growing company in America in 2006.

Thralow Inc. started as a retail outlet called Peepers in downtown Duluth’s Holiday Center. The company began selling sunglasses online in 1996 at Peepers.com and expanded to binoculars and other optical products with various Web sites. Thralow sold the business to Eye City Inc. in 1999, then bought it back at a fraction of the
original sale price when EyeCity folded in 2001. Thralow Inc. was named the
203rd fastest-growing company in America in 2006 by Inc. magazine.

The Omaha World Herald reported on Feb. 7 that NetShops laid off about 50 people to achieve efficiencies and didn’t plan more cuts. Coonce said that was due to a
reorganization unrelated to the current transition.

The integration of the Proctor and Omaha work forces probably will take several months, she said.

Read the comments on the article here.

On a positive note, Laura Erickson's new blog appears to have been pulled. Maybe she's getting Birderblog.com back? Right now, Birderblog.com goes to Binoculars.com, so I have to assume something's going on with the two sites. Laura, if you can, please give us details.

Another person not happy with how they were treated by Netshops.

Amanda Collier's blog

As always, feel free to email me or post a comment.

Decision day and my reply to "D"

How many Thralow reps decided to make the move? Is it really 3 of 50 like I've been hearing?

For those of you electing to be laid off, here is information on how to file for unemployment benefits.

Now, onto D's posts.

D said

Communication definitely broke down with the old org chart. Since the
layoffs and the revised org chart, the structure makes a lot more sense, in my
humble opinion. Also, depts are now being tasked with creating SOP (standard
operating procedures) which is par for the course with most companies of this
size. The SOPs are going to specifically address accountability and provide
training material. We are long overdue for them.

The old (August 06 - Feb 07) 'stage' org chart was similar to the store management way of doing things. That 'style' of management worked well in stage 1 & 2. Stages 3 & 4 seemed to lose something - in my opinion it was because of a reduced # of staff in each area working on the sites.

SOP's should have been something done over a year ago when the operations team was in place. Accountability and real, definable measurements of job performance was something that should have been handled by that team as well. (Maybe then we wouldn't have the fraternization issues we have now. Is Paulette going to KC on a shoe run again anytime soon? How many days off did she take unpaid last year? Did all the employees get treated the same way or was she given special treatment?) Yes, Netshops is a 'growing' (or is that immature?) company and 'these things take time to develop' - sort of like the supplier score cards. When I was there, I didn't find a single one that had been completed. I hope Doug hasn't been led to believe that they were....

Maybe if someone was actually accountable for getting these projects done, Netshops wouldn't have needed to lay off 60+ employees in February. Those employees would have moved out of the company on their own based on clearly defined criteria based on their jobs, instead of just a (seemingly) random bloody swath being cut through the work force.

D also said (about the layoffs)

I went directly to the exec in charge of my department and asked for an
explanation. And I got one.
NetShops is not a failing business nor is it run
solely by Doug. Doug is a visionary leader who often asks for the seemingly
impossible while the other two's pragmatism provides the balance. NetShops also
has a unique business model - only our copycats like CSN come close - and we're
still trying to figure out how to make it run like a well-oiled machine. Growing
pains with such rapid expansion were inevitable. At one time only human bodies
could get the job done but now with so many technological advances being made
internally, humans are being replaced by computer applications. Do you think it
was a coincidence that the first layoff occured immediately after Site Manager
was rolled out? You may recall a chunk of merchandisers were let go or
repositioned.

Very interesting thoughts D. "Growing pains with such rapid expansion were inevitable." Sure. I can appreciate that. However having fewer people to do the same amount of work is insanity. Having fewer people to do more work (if Netshops rolls out another 50 - 60 sites again this year) is just plain stupid. Now, Netshops has applied for some tax breaks, namely the Nebraska Advantage Act. As you can see from the article, Netshops indicated they are going to invest 9.2 million and create 440 new jobs. So, if "growing pains with rapid expansion" really was inevitable and those laid off were being replaced due to technological gains, such as the use of Site Manager, why would Netshops need an additional 440 employees? Again, this strikes me as an easy way to look profitable for the investors. It is corporate churn and an example of how little the employees doing the job day to day are really valued by Doug and Co.

NetShops is getting itself ready to go to the next level. Much like when you
negotiate a mortgage with a banker they talk accounting ratios to get an
approved loan amount. The same is happening to NetShops - we had ratios that
made us unattractive to investors and they needed to be fixed. You can bitch and
moan all you want, but these rules are applied to any business with the goals
NetShops has. Doug telling potential investors that he couldn't let go of
employees because they're good loyal workers would have meant proverbial doors
slammed in our faces and the inevitable tanking of NetShops as a whole.

Again, "ratios that made us unattractive to investors" does not make sense when Doug is applying for tax breaks and claiming he's going to add 440 new jobs. If the ratio was wrong in the first place, why would he need to hire new people? I don't know about you but when I bought my house, the bank didn't tell me I had too many children and I'd need to let some of them go.

Once you go "corporate", there's no going back and the Dougs of the world don't
make all the rules anymore.

That's true. Why do you think Netshops isn't as fun as it used to be anymore? Why did a special 'activity committee' need to be created? Where are the patio umbrellas on the call center side? Where are the hammocks/daybeds and adriondack chairs where people can meet and exchange ideas? Those have been traded for more traditional conference rooms to look more 'corporate'. I guess that's what we need to do when the Buffetts and Blumkins of the world come to tour the office.

I once worked at a plant that was profitable for 33 years straight with no
layoffs. And what happened? The plant was shut down for the better of the entire
company. Fair? Nope. Look at the Big 3 and their job security policies - all
three are so far in the red they may never recover.

By 'big 3' do you mean Doug, Julie and Mark? If you think they aren't making money in this venture you're crazy. Do you think they're doing this for the fun of it? Also, how do you know they're 'in the red'?

I'm still working at NetShops but I admire the balls it takes to follow through
with a very difficult decision.

A 'difficult decision'? It wasn't a difficult decision - it was a quick fix. If profits were really down, why weren't more of the upper managers let go? Why was it store managers on down? If things weren't working, why are the same people still in place in the upper portions of the company? Tina, Dave, Marina, Dawn, etc are all still in their positions. While the store managers and buyers had input on what happened to the sites, ultimately the responsibility falls on the stage directors. If the 'stage' approach wasn't working, why is the person who thought of it still there? Oh wait - she's an owner. (Not that she's going to be there much longer from what I've heard. Once she leaves for the baby, I've heard rumors that she may not come back...)

A healthy, growing company does not let 60+ people go because of 'technological advances'. Especially not when they're applying for tax breaks and claiming they'll be adding 440 new jobs to the city/state economy. (So, really after Netshops lays off the Thralow reps, that will bring the total laid off to approximately 100 employees let go in 90 days. In reality, they're only creating 340 new jobs, not the 440 as submitted on their application.) Netshops has issues and those issues start at the top and roll down from there. As always, I look forward to your emails and comments.

So, what would you say...ya do here?

I already told you: I deal with the god damn customers so the store managers* don't have to. I have people skills; I am good at dealing with people. Can't you understand that? What the hell is wrong with you people?

* Yeah, I changed it to be more Netshops specific. So what?

I just wish I could have taken a copier with me when I left....

Netshops affiliates have become aware of this blog...

Apparently the Netshops affiliate network has become aware of my blog. If you want to read the thread, do so here.

To those reading from the affiliate forum, no, I'm not Peter Peter. Leader, you make some very valid points - I'll touch on those in a moment.

Layoffs at Netshops?
I just put together two bits of information and got
nervous. A few weeks ago, Spilsbury went bankrupt and left a bunch of affiliates
unpaid in the lurch (http://forum.abestweb.com/showthread.php?t=86242).Now it seems
that Netshops is having layoffs:http://laidoffbynetshops.blogspot.com/2007/02/missed-this-article-in-omaha-world.htmlhttp://en.wikipedia.org/wiki/NetShopsIs everything OK? Should
affiliates be worried? Is there any information other than what is doubtless the
party line of "Don't worry, everything's fine"?Pete

Nate - your response

NetShops is a very healthy, rapidly growing company. Most people don't know
we recently purchased another company and inherited about 50 employees. Plus,
because we are still a young company (just turned 5) in a rapid-paced market, we
frequently make necessary structural changes. So yes, some employees were
transitioned to new roles within the company and some were let go. But NetShops
is NOT going anywhere but UP, and you needn't worry about not getting your
commission checks!By the by, we were #13 on Inc. 500's list of fastest growing
companies last year, and the company we purchased was #244.

That's great and all, but the layoffs were of existing employees - not those inherited from Thralow. How many of those 50 'inherited' employees are going to make the transition from Duluth to Omaha? Estimates I'm hearing put the number at, oh, about 3. The song and dance Netshops put on - touring the Netshops office, going to the Henry Doroly Zoo, scavenger hunting at Chuck E Cheese pizza, etc - really didn't 'sell' the 'inherited employees' on moving. So, if 3 of the 50 Thralow reps don't move, they'd have to be laid off, so that would put the 90 day layoff total at about 105 employees released in less than a 3 month period. This is not a sign of a 'growing company'.

"Frequent structural changes" = frequent changes in direction, reorgs and layoffs (in layman's terms). It also confirms what I've been saying all along - there is no job security at Netshops, there is no possibility of a long term career path for employees and the only direction Netshops is going is in a balls to the wall, flat out, mad rush to look profitable for investors.

Now, if this were just a blog by one person and I was bitching and moaning about how unfair it was to be laid off, I didn't deserve it, etc, that would be one thing. Unfortunately, for Netshops, this blog has started to take on a life of it's own. People are sending me information on a daily basis - the current reorg, what the Thralow reps feel like (and what they're doing) and questions they'd like me to throw out there - because they don't feel safe in the current environment asking them themselves. It's really too bad.

Don't believe me? Take a look at all the comments posted to the blog. There isn't a single one done by me and that just scratches the surface.

Leader, your comment -

With anything negative you read: You need to pay attention to WHO is talking,
and JUST WHAT their beef is. Then decide if you think the complaint(s) are
reasonable, and if you should consider the complainers to be credible.

These are mostly former employees talking. However, I am getting information from current employees and some of those 'inherited employees' Nate mentioned. (I wonder how the Thralow reps feel about being called 'inherited'?) Nate does need to tow the company line and I understand that. (Glad I didn't have to be in the meeting about this blog...) Sorry about any additional pressure you might find yourself under Nate. You always seemed like a decent guy and I hope I haven't put you in an uncomfortable position.

Employees get disgruntled when something SUCKS! A company shouldn't have
any/many hugely disgruntled employees, and when they do, that in itself is a
sign of a problem.

Employees at Netshops have been disgruntled for a long time now.

After the layoffs in August of 06, people were pretty upset. Some quit as a result, some were put into positions that weren't what they were doing before and they weren't given much time with the Christmas holiday looming to learn their new roles very well. (They weren't given choices in these new roles either by the way - we came into the manager's office and were told, "Here's where you are on the new org chart. Hope you like it." Even more people quit. Those that didn't and weren't happy were made to apply and interview for, essentially their old jobs as the people who quit were replaced. Nice, huh?) By the time October hit, Netshops employees were asked to do extra work - taking calls in the call center, answering customer service emails they weren't trained to handle, and working in the warehouse - usually 50 - 60 hours per week - along with their normal duties. It was called the "Lend a hand" program. Worst. Idea. Ever.

Many of us thought with a profitable holiday (more profitable than any before - up 85% year over year) we'd be safe from a reorg and layoffs. Unfortunately, we weren't able to hit our gross margin or our profit goals. (Is this because of something the employees did/didn't do, or, because of wildly inaccurate & unattainable goals? That's a subject for another blog, another time.)

And the problem's not the employee (assuming that the angry employee is
reasonably sane). The size of the company is important to consider, though; any
big company probably has several employees who hate it and who will usually be
quitting soon anyway, but a small one ( under 50 people ) only needs a couple of
antis to indicate a problem.So the question is "what is it?" What sucks so bad
that someone has been made angry enough to write blogs and wiki entries about
it?! It's a mistake to assume in favor of the company in these cases. Usually
when the employees start to say a place sucks, it's because it does! (Sometimes
it's just some kook or lamer who had unreasonable expectations, but I haven't
seen that too often.) Personally I find it quite relevant , and would like to
know if promoting NetShops means promoting a bad employer. (And I don't see any
keywords on that blog that'd count towards a what I'd consider a G-bomb...it
doesn't seem to have any "choice" words directly linked to NetShops' URL. )

Again, very good points. At one time, Netshops had approximately 440 employees. In less than a year, I'd estimate they're down to about 300-ish based on the people I saw leave between August and February, and the February layoff. Not a 'growing' company in my opinion. Yes, they're adding more stores. Great. Without the staff to handle the stores they have, how are they going to continue to grow? How will they handle customer service issues? (Off on a tangent here, how do customer service issues/failures effect affiliates?)

Something else to think about. Netshops purchased Thralow, like Nate alluded to. Good company, good people, good sites. Binoculars.com, Telescopes.com, Pans.com, OperaGlasses.com, EMetalDetectors.com, Utensils.com, etc, etc. Those sites are drastically different from hammocks, diaper bags, slippers, pajamas, beds, christmas trees, and adirondack chairs. The technical knowledge needed on the Thralow sites is an important part of selling product on those sites. Netshops reps aren't going to have the experience needed to make an educated guess, much less an informed opinion on what a customer should do. How well do you think Netshops is going to do in categories they don't fully understand?

Last thing for tonight.

"D" - since you've asked that I don't repost your comment, I won't, but I do have a reply I'm working on. I'll need to repost some sections of your post, but I won't repost it in full. That's the best I can do.

Eric - yes, I'm still interested in continuing our conversation - I'll email you soon. Sorry for the delay in responding - interviews have been taking up my time these past few days.

Here it is. My first blog.

Let's see....a nice Netshops green should work well for my blog. Almost makes it look...official.

Now, where to begin?

I guess we'll start at the end. That's probably the best place to start the tale.

Netshops laid off over 60 employees on February 1, 2007.

After a profitable holiday - one where the company was more profitable than ever according to Doug Nielsen (President and CEO) - more than 60 people lost their jobs. The message was clear. "Thanks for your contribution this holiday season. We'll be seeing you." No reason given - just "Here's your compensation package. There's the door."

Kind of takes some of the 'shine' off of that "One of Omaha's Best Places to Work in 2006" award now doesn't it? Tough to be one of the "Fastest Growing Companies" when you lay off almost a third of your work force. I don't think we'll be seeing the Netshops name on those award lists this year.

Oh, by the way, I was one of those let go. This is my story. As I tell the story, hopefully some of the other people let go in this lay off (and previous layoffs) will choos to comment on their experiences. Feel free to email me (laid_off_by_netshops@yahoo.com) as well if you have questions or comments.