The Australian carpet industry is in meltdown after a major downturn
In a year that saw the country’s largest carpet manufacturers go bankrupt, carpet makers have announced they are laying off more than a quarter of their workforce.
More than a third of the workforce has been laid off since the end of April.
In a statement, carpet maker Carpet Loom, which has a turnover of more than $US1 billion, said it would cut about 1,600 staff.
It said the cut was part of its efforts to cut costs and make its business more competitive.
Carpet Looms general manager David Jones said the company had taken a “conservative” approach in the last year, which included reducing the number of workers and focusing on the areas of “productivity, innovation and technology”.
“We have a business model that is driven by cost cutting,” Mr Jones said.
“Cost cutting means reducing the workforce, reducing our cost structure, making our products more efficient and making them more attractive to consumers.”
Mr Jones said he expected the company to make a profit by the end, but that it was “not going to be as good as we could have hoped”.
The company’s board of directors has voted to put the entire company out of business, which is a “major blow to the business”, Mr Jones told ABC Radio Adelaide.
The cuts, which affect about 3,000 people across the country, were announced by the Australian Council of Carpet Industry (ACCI), which represents the industry.
ACCI president and CEO Rob Wood told ABC radio the cuts were a blow to Carpetlooms’ reputation and it would have a “negative impact on carpet retailers and consumers”.
“We are not in the position to take any solace at the moment,” Mr Wood said.
“The carpet industry as a whole is struggling, and the business model is going to need to change.”
Mr Wood said the loss of so many carpet makers could be devastating for the industry and its customers.
He said the ACCI had warned that the industry could face a downturn if the government did not change the Government’s carpet tax.
Labor leader Bill Shorten, who was in Canberra for the Commonwealth Games, also criticised the government’s tax on carpets, saying it was a “big, fat, fat mistake”.
“This tax is designed to hurt the carpet industry in the most direct way possible,” Mr Shorten said.