Coby Electronics Corp., a privately held consumer electronics company with headquarters in New York, will close its East Coast distribution operation in Savannah by the end of June.
The closing will affect 10 permanent employees and an undisclosed number of temporary contract workers at the Savannah warehouse, according to Coby president Michael Troetti.
In all, the company announced layoffs of 35 percent of its Coby USA staff, a total of 42 people, including employees in the New York headquarters as well as salespeople in offices across the country, he said.
In Savannah, the decision was based on several factors, Troetti said.
“There was a change in the routing of the container ship line that brings product from the factory in Japan,” he said. “Where Savannah was once the first stop after transiting the Panama Canal, it is now the second. That adds time on the water, which increases costs.”
The other major factor involves a restructuring of Coby’s product categories.
“We are consolidating our product line and also reducing the physical size of some products,” Troetti said. “That means we don’t need as much warehouse space.”
The company is in the process of moving all its warehouse operations to the West Coast.
Other contributing factors to the overall layoffs include “the prevailing economic headwinds and the convergence of products that Coby and other consumer electronics companies are facing,” Troetti said.
“This was a difficult, but necessary, decision for Coby’s executive management team to make,” he said, adding that the company “had little choice but to restructure its operations to ensure the company’s continued success.”
In July of 2009, Coby signed a lease for 120,000 square feet of space in the former CrossDock USA facility at 150 Knowlton Way in Crossroads Business Park. At the time, David Sink with Colliers Neely Dales of Savannah, who represented Coby in the site selection and lease negotiations, said the company’s primary reasons for locating in Savannah were proximity to the deepwater port, the immediate availability of first class warehousing facilities and a skilled work force.
When the project was announced, it was said to represent an investment of about $500,000 and was expected to bring about 25 new jobs initially, Coby director of operations Daniel Song said at the time.
Troetti said the company is currently in conversations with the landlord regarding the resolution of the lease.
As for the possibility of Coby coming back in the future, Troetti said it was unlikely unless the current shipping line changed back to its original route.