Sawbones, in ‘painful’ move, reduces its workforce

About 90% of those laid off were island residents.

Layoffs have hit one of Vashon’s largest employers, Pacific Research Northwest (Sawbones), with 60 positions eliminated in recent weeks.

Kit Gruver, the human resources manager for the company, described the exit of so many workers as extremely painful.

“We’re reeling, as a company, from the loss,” Gruver said, in a phone interview that also included Sawbones CEO Norine Martinsen. “Many of these folks have worked here for much of their adult lives. This is a very hard time.”

“In our 40-plus year history, we’ve never had layoffs,” Martinsen said.

Currently, approximately 100 workers remain at the company, out of a pre-pandemic payroll of 165 employees. Gruver estimated that 90%of those laid off were island residents.

The decision to lay off workers came after a months-long period of adjustment by Sawbones to the challenges of the coronavirus era, and the depletion of $2.1 million received by the company as part of the Federal Paycheck Protection Program on April 24.

Money from the government relief program, Gruver and Martinsen said, was used to fund the employment of the full Sawbones staff for eight weeks. During these two months, most employees worked 30-hour workweeks but were paid for 40-hour weeks.

Sales for the company, which manufactures medical training models for orthopedic and medical education, dropped 75% in the immediate wake of the pandemic, and have not yet recovered, Martinsen said.

“A lot of our work is with training and conferences, which obviously isn’t happening,” she said.

Still, the company has pivoted repeatedly throughout the pandemic in an effort to adapt and retain its employees.

In late March, the company closed down briefly but was able to quickly bring some employees back to work after being deemed an essential business due to its work in the medical field.

During the brief March closure, Sawbones paid all its employees for two weeks, but some of the workers furloughed at this time did not return until the receipt of the Paycheck Protection Program funds.

The company also pivoted, right away, to make personal protective equipment (PPE), including an airway/respiratory containment (ARC) system used as a protective barrier for airway and respiratory procedures during COVID-19-related intubation procedures.

In addition to this new product, the company also made 1000 face shields that were shipped out to a hospital and donated PPE that it had onsite, including gloves, masks and coats. It also began the manufacture of another product used by doctors to diagnose the severity of COVID with ultrasound.

Still, these efforts haven’t yet translated into a sustainable source of income for the company, Gruver and Martinsen said, due to the lack of a national coordination effort to distribute PPE throughout the pandemic.

“There was a lack of infrastructure to get those products out,” said Martinsen. “There wasn’t a national call and a central location — that’s been challenging for manufacturers who wanted to help with the cause.”

Still, Martinsen expressed hope that the company can remain nimble and even eventually rehire some of the workers who have now been laid off.

Sales, she said, were slowly increasing, especially in the international sector of the business.

“We’ve had competitors that have gone out of business,” Martinsen said. “Because things are opening up, we are seeing that Asian sales have picked up, and they were first to go offline. Europe is coming back. We do have some hope.”

Another bright spot for the company, Gruver said, has been the health of its employees.

On March 10, a Sawbones employee who was not a resident of Vashon tested positive for the coronavirus — the island’s first known case of COVID-19.

But due to the company’s immediate implementation of strong safety protocols, including strictly enforced mask-wearing, hand-sanitation, temperature checks and social distancing, the company has not seen another case since that time, Gruver said.

“The community of employees is taking care of each other by respecting these protocols,” she said. “I feel really proud of folks for keeping the company healthy and able to rebound from this experience.

One more silver lining, for laid-off employees, was put in place years ago by the company.

In 2010, Sawbones became an “employee-owned” company, when Foss Miller, who founded the company in 1975, and his business partner Denzil Miller, created an “employee stock ownership plan” (or ESOP), designed to gradually put his and his partner’s ownership shares into shares owned by Sawbones employees.

For the laid-off employees, this means a payout in one year, when their shares in the company are cashed out for them, providing some funds for retirement.

But in the meantime, the former Sawbones employees are now part of a growing rank of unemployed islanders.

According to the state Employment Security Department (ESD), Vashon had a total of 1,383 last week, meaning more than one-fourth of the island’s workforce is now seeking unemployment aid.

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