The massive layoffs at Harman Professional Solutions affect more than just the 650 employees losing their jobs.
It’s safe to say that almost everybody in the AV integration market – directly or peripherally – knows somebody who works for Harman. It’s understandable to wonder if what happened at Harman will hit closer to home in the near future.[related]
The layoffs of 650 employees at Harman Professional Solutions is personal and emotional for the industry, but there may be a long-term silver lining. Few in the industry were surprised that Harman did something.
After Samsung acquired Harman in late 2016, many in the industry wondered what would become of the sprawling manufacturer’s various brands. Even before that, Harman was forthcoming about its plans to restructure as more of a one-stop-shop for integrators.
Harman Professional Solutions was anything but a one-stop shop. “They have so many lines now,” says Bill Chamberlin, VP of global sales, Verrex. “Sometimes you don’t even think of being a big Harman dealer but we do carry many of them. If you look at a lot of the lines they acquired over the last few years, a lot of them are operating still pretty independently, so it kind of makes sense that they had to do this at some point.”
It’s the extent of what they did that has taken the industry by surprise. “I could have predicted that after Samsung acquired Harman there would be a reduction, but I was surprised at how big it was,” says Julian Phillips, executive VP, Whitlock. The move is “concerning,” and Phillips says you have to be hope that there’s a good plan behind the move.
“I’m shocked by the number, not shocked in general,” says Bruce Kaufmann, president and CEO, Human Circuit.
Possible Silver Lining in the Harman Layoffs
Let’s be clear that nobody is pleased with 650 employees losing their jobs at Harman Professional Solutions. Each Harman dealer and integration firm executive we spoke to expressed profound sympathy for the AV professionals that lost their jobs. They also, however, reached for signs of optimism.
There is a plan in place, according to Harman Professional Solutions public relations director David Glaubke, for the dramatic changeds within the organization not to impact its dealers. “We will ensure that the process is completely seamless for our customers,” he wrote to CI.
Verrex seems to deal more with sales representative for Harman’s respective brands rather than with Harman itself.
As such, “I candidly don’t see that we’re going to have any real immediate impact,” Chamberlin says. “You don’t want to wish that on anybody, but it’s a fairly large organization and from our standpoint, I don’t think we’re going to see any immediate impact.” Meanwhile, there is a general consensus that Harman had just gotten too big and sprawling and there is a hope that this restructuring helps pull that back somewhat.
“Harman is a really good example of how a lot of manufacturers have gotten too fat,” Kaufmann says. “Especially since putting multiple groups under one [umbrella], Harman has been fat forever.”
Through consolidation and reliance on sales reps, Harman Professional Solutions “had an extremely heavy organization,” Kaufmann adds. Phillips calls Harman’s recognition that a significant shift had to be made a “rationalization,” adding, “I hope that as a result of that rationalization, there will be a lot of innovation.”
Read next: Verrex Acquired: 8 Lessons for Others Looking to Sell
From a recruiting standpoint, Whitlock sees 650 AV professional becoming free agents as an opportunity to bring expertise in-house. “There will be some very talented people on the market and we will look at that,” Phillips said.
Whatever silver lining exists, however, is relative and ignores other evidence displayed by Harman Professional Solutions, according to Phillips. “Don’t think for a minute that will be the last one over the next year or year and a half. Watch the distribution market. Watch the integrators. We’ll see more.”
