Staff photo by Tim Barber / Charlie Waldo builds the framework for the standard La-Z-Boy recliner in Plant 6 at the Dayton facility.

Home-bound Americans may be spending more time in their La-Z-Boy recliners, but the company that makes La-Z-Boy chairs and furniture is cutting 850 jobs to streamline its operations amid the slowing U.S. economy this year.

La-Z-Boy said it is laying off about 10% of its global workforce and closing a 60-year-old factory in Newton, Mississippi to help respond to the slowdown in sales due to the coronavirus and to rightsize the company for the long term. Production from the Mississippi plant will be shifted to available capacity at the company's biggest plant in Dayton, Tennessee, along with La-Z-Boy's other factories in Neosho, Missouri and Siloam Springs, Arkansas.

La-Z-Boy CEO Kurt L. Darrow said the coronavirus has "had a far-reaching impact" on the company, forcing a shutdown of production in March, the closing of retail stores and the implementation of new processes for restarting its furniture making operations in late April.

"It is now appropriate to leverage the efficiencies we have created across the company and right size our business for the long term given the impact of COVID-19 on the state of the economy, with wide-sweeping unemployment levels and the uncertain timing of a full economic recovery," Darrow said in an announcement of the layoffs. "These are difficult decisions to make and we deeply regret the impact they will have on those employees who are affected."

La-Z-Boy will continue to operate about 4.5 million square feet of manufacturing space and Darrow said he is confident "we will emerge from the crisis with strength and remain a leader in the industry."

La-Z-Boy closed the Dayton plant in March due to the national COVID-19 outbreak and then reopened on April 27 with 540 employees. Last month, the company boosted staffing in Dayton to 715 workers, and is now operating the facility with about 1,100 workers.

"As the demand environment improves and we increase production, we will bring more employees back to work," La-Z-Boy spokeswoman Kathy Liebmann said Friday.

Prior to the shutdown, La-Z-Boy had about 1,400 employees at its Dayton complex, which is the largest private employer in Rhea County. The factory accounts for about 46% of all La-Z-Boy's branded business, and last year La-Z-Boy opened an $18 million innovation center in Dayton.

"Since restarting production at the majority of our plants at the end of April, we have steadily increased production and continue to bring back more employees to meet demand," Darrow said. "As more states open and allow our retail partners to re-engage with their customers, we anticipate a stepped process of increasing production and bringing additional employees back to work."

The shuttered Newton upholstery plant had about 300 employees and was permanently closed this week.

La-Z-Boy expects to incur from $5 million to $7 million in fiscal 2021 of one-time pre-tax charges related to the plant closings and layoffs. The company plans to release its fiscal 2020 fourth-quarter and full-year results on June 23.

Shares of La-Z-Boy rose 4.2% Friday after the company announcement, rising to the highest stock price since March 4 before the coronavirus spread shutdown much of the United States.

Contact Dave Flessner at or at 757-6340