Columbia House to Lay off Employees, Close Plants

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The Columbia House Co., New York, said yesterday it plans to lay off as many as 500 employees and close two of its facilities.


This is the second major reorganization for the direct marketer of music and video entertainment products within a year.


According to an internal company memo, Columbia House plans to close its Bloomington, IN, distribution facility by the end of June, where about 190 employees work. In addition, by the end of the year, the company expects to close its Colorado City, CO, distribution center, which employs 500 people. And, 44 jobs will be eliminated from its New York offices as well as some in Terre Haute, IN.


However, according to the memo "although these actions will result in a significant loss of positions throughout the company, we anticipate that several hundred new positions will be created in Terre Haute as a part of the overall consolidation."


The memo also said the move "will drive greater efficiencies and enable the company to capitalize on emerging opportunities in both the traditional direct marketing and as many of you may be aware, on-line segments of the club market."


In February 2000, Columbia House announced the elimination of 2 percent of the company's 3,500 employees. In March of that year, the company also reorganized in the face of its pending merger with CDNOW and divided the firm into three divisions: Columbia House, columbiahouse.com and CDNOW.


Columbia House is co-owned by AOL Time Warner and Sony.


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