After four decades of unprecedented growth, MLM giant Amway Corporation is slipping downhill. Amway's sales have slumped from a high of almost $7 billion (at suggested retail, a nonexistent figure in any case) in 1996 to $5 billion. Along with the nearly 30% drop in sales, the company has been retrenching.

There have already been layoffs at Amway headquarters in Ada, MI. In 1998, about 700 North American employees were laid off or given early retirement packages.

Amway Corp., headquartered in Ada, Michigan, has announced that approximately 1300 of its employees worlwide will be laid off in the coming months. Blaming the internet for their sales slump, Amway plans to eliminate about 900 workers from its world headquarters in Ada. Most of those cuts will come from salaried managers and staff positions. Additional jobs will be cut from its California operations, and from overseas.

This represents a reduction of 11% in Amway's workforce. However, nearly 20% of the employees in Michigan will be losing their jobs.

Amway's sales have plummeted nearly 30% since 1997, from almost $7 billion to only $5 billion. About 70% of Amway's sales come from outside the US.

News reports called employee morale "somber" as the cuts were announced.

According to a report by the Detroit Free Press,

"Amway officials. . . refused to call Wednesday's announcement a cost-cutting effort, even though sales are slipping and the officials noted the cuts will save the company $300 million annually.

"Instead, they blamed the cuts on a need to better develop Internet sales opportunities to aid its traditional sales force. "

However, Van Conway, a business turnaround expert, claimed that the announced layoffs represent "pure reduction of overhead and downsizing."

Marketing professor Michael Bernacchi interpreted Amway's statements as "part reality and part smoke screen."

In 1998, Amway cut about 10% of its workforce, blaming that reduction on economic downturns in Asia. However, those cuts were primarily in their Michigan and California facilities. Amway also effected workforce reductions in 1998 by offering some employees early retirement -- an option not being offered in this round of layoffs.

Last February, Amway announced a global restructuring which included the probability of job cuts.