Makita USA is putting into effect a “company-wide reduction in force,” and has filed notices of mass layoffs with multiple states.
According to the public documents (linked-to below), a total of 213 employees will be affected by the layoffs.
The positions and job titles vary, and include service technicians, warehouse jobs, design and marketing jobs, sales jobs, territory managers, customer service representatives, retail sales reps, and others.
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The company-wide layoffs affect a number of service centers around the country, 3 distribution centers, Makita USA’s corporate headquarters in La Mirada, California, a customer service office in Nevada, and an office and distribution center in Georgia.
According to the letter Makita USA issued to affected associates, copies of which have been provided to state governments, the layoffs are set to go in effect on June 28, 2023. Affected associates were notified on April 28, 2023.
There will be at least one facility closure. A notice provided to the state of Oregon describes the permanent closure of a Makita USA factory service center in that state.
We have not been able to learn whether the other service technician layoffs are also related to facility closures, as not all states’ WARN notices are publicly posted.
Makita USA’s top rivals in North America have also cut jobs this year. Milwaukee announced a closure in February and Stanley Black & Decker, Dewalt’s parent company, closed their Craftsman hand tool factory before its products appeared at stores.
It is unfortunate when any jobs are cut, and we hope for the best for everyone affected.
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Affected Jobs by Location
Factory Service Centers in MA, NV, CA, OR, FL, TX: 31 jobs
Distribution Centers in CA, IL, TX: 51 jobs
California Corporate Office: 49 jobs + 19 jobs by out of state workers
Reno Distribution Center and Customer Service Office: 5 jobs
Georgia Distribution Center and offices: 22 jobs + 36 jobs by out of state workers
Total: 213
Learn More: Notice of Layoffs (PDF via Oregon Rapid Response Activity Tracking System)
Makita’s Business Performance for the Year Ending on March 31, 2023
Makita prices in the USA have increased in April 2022, October 2022, and most recently at the start of May 2023.
Makita’s notice to employees at their soon-to-be-closed service center in Oregon reads:
This notice is being provided to you to provide you with notice of layoff as a result of a Company-wide reorganization and reduction in force made necessary by the Company’s current financial condition.
We dug into Makita’s financial reporting to see if it could help explain this or shed light in “the company’s current financial condition.”
In their April 27, 2023 financial filing in Japan, Makita notes that “sales were sluggish in Europe and North America.” With respect to revenue:
In North America, while sales decreased as stay-at-home demand subsided and monetary tightening created wariness of a recession, [consolidated] revenue increased 6.1% year on year to 119,064 million yen due to the depreciation of the yen against local currencies.
For the year ending March 31, 2023, Makita’s North America segment reported total revenue of 125 billion yen (~$928 million), and a loss of 912 million yen (~$6.77 million).
For the same period, Makita reported total consolidated revenue of 765 billion yen (~$5.67 billion) and a total consolidated profit of 28.2 billion yen (~$209 million).
So while Makita reported a total profit for the year, their North America segment reported a loss.
Here is what Makita reported for their North America segment over the past 5 years:
FYE March 31, 2019: 267 million yen (~$1.98 million) PROFIT
FYE March 31, 2020: 201 million yen (~$1.49 million) LOSS
FYE March 31, 2021: 3,681 million yen (~$27.3 million) PROFIT
FYE March 31, 2022: 803 million yen (~$5.96 million) PROFIT
FYE March 31, 2023: 912 million yen (~$6.77 million) LOSS
All dollar amounts are converted using 5/5/23 rate of 134.80 yen to 1 USD.
Learn More: Makita 2022 Financial Results (PDF)
Makita USA has not issued any public statements about this matter.
Thank you Daniel for sharing this news with us.
Jared
I wonder how much this explains the recent price increases. Impossible to know from the outside I’m sure.
CA
I hate to see it. I wonder who the DOD contractors buy their tools from. Seems to be the only place our country is investing in now days.
fred
From what you say about their sales in NA – the trimming back seems prudent. While mortgage rates have recently eased a wee bit, the predictions for new housing construction and old-stock renovation seem to be signaling retrenchments. My ex-compatriots seem to be feeling a squeeze with their commercial sector work the doldrums and their residential work significantly down from what it was during the height of the pandemic. Fed monetary tightening may not yet be curing inflation at the grocery store – but the reduction in easy financing is probably curtailing building projects and renovations. Many pundits say we are headed for a recession – so Makita may just be trying to get out in front of it.
Steve
$1B in sales in NA an.d can’t make a consistant profit. I was a Makita tool purchaser many years ago and left because they were very slow to evolve snd bring out tools that DeWalt and Milwaukee had. Seems like the brand continues to struggle when I though they could have been the dominant professional brand. They’re not going anywhere any time soon, but it just seems like they have missed some good opportunities. Hopefully, raising their prices keeps them on the plus side. People will pay a little more for their brand or something innovative…
Bonnie
I never got the sense the US branch had much input with the parent company.
Munklepunk
I don’t think the parent company cares whatsoever about the US/NA market. I can go out right now and track down a Milwaukee or Ryobi sales rep, I doubt I could find a Makita rep within 1,000 miles.
Tom
Same, to some extent, in New Zealand. Makes me wonder how TTI can turn a profit with the number of sales staff they have. Yet, they aren’t number one on building sites, maybe #3? Creative accounting perhaps?
Franco
I don’t have numbers to back this up, but my guess is that worldwide, they are one of the bigger brands.
Milwaukee is big in the USA, but Europe, Asia, and the rest of the world, my guess is they have small to even zero market share, depending on where. Dewalt probably does better, but still nowhere near as big as in NA.
I know to many Americans Makita seems different or quirky, even crazy with some decisions, but I believe they take decisions based more for the global market, less for the US.
fred
Some years ago – when I looked – I think that Makita was #3 worldwide in small power tool sales – behind SBD brands and TTI brands. Others like the KKR brands (Metabo, Hi-Koki) , ITW, Chervon et. al. were further down in ranking. I’m not sure how that holds up today.
When wandering around in Australia – I think that i saw a lot of Teal tools – maybe some Yellow – but don’t recall seeing any Red.
I’ve been in Europe more – and think that I’ve seen Makita tools quite a few times. I’ve read that European sales account for nearly 50% of Makita’s revenues – while NA is a measly 15%.
With TTI brands – it may be a bit more confusing since they produce tools for sales in Europe under the AEG brand (under license from Electrolux Sweden) rather than Ridgid (brand licensed for sales at Home Depot by Emerson) . I also think that Ryobi (Japan) license for TTI- made tools might also be exclusive to the Home Depot market.
fred
Doing a bit of Googling – I came across this site that says that Bosch ranked #1 in 2020 – but the numbers seem confusing and add in something they call “brand value” whatever that is. They also don’t aggregate all SBD and TTI brands together.
https://blog.bizvibe.com/blog/top-power-tool-brands
Another webpage had slightly different rankings citing 2019 stats. 3M was included in that mix – not a company that I usually associate with power tools.
https://www.tharawat-magazine.com/facts/top-ten-power-tool-brands-in-the-world/
Stuart
There is a LOT of inaccurate information out there. Some claims wildly misinterpret available data, and others don’t seem to have any basis in reality.
Bosch generated 88.2 billion euros in 2022, across ALL sectors.
Power Tools is part of their Consumer Goods sector, which also includes household appliances.
Their Power Tools segment also includes brands such as Diablo, Freud, and Dremel, as well as Bosch Professional and DIY (EU) tools. In 2022, this entire segment earned 21.7 billion euros out of the 88.2 billion total. So that’s roughly 24.6% of their business, and this includes all of the Bosch and subsidiary tool brand efforts, plus Bosch home appliances.
This took me less than 5 minutes to fact-check.
Bosch also breaks down their revenue by region. However, they don’t break things down according to brand or brand in specific regions.
TTI and Stanley Black & Decker – as far as I have seen – also do not break down revenue by brand. While there are some estimates about market share, none that I have seen draw from publicly available information. A lot of the “reports” I have come across or been pointed to are grossly inaccurate in at least some regards, such as employee counts, and cannot be trusted.
Franco
When I was thinking of worldwide market share, I wasn’t thinking of the parent companies. Rather, I was looking at Makita, Milwaukee and Dewalt on their own.
Here, many love Milwaukee and I believe they have the biggest market share. And by this I mean Milwaukee, not including sales from Ridgid (probably not significant) and Ryobi (probably a nice chunk).
You had another post this morning mentioning Oldsmobile, which made me think of a car comparison.
Bosch, like Stuart mentioned have significant sales from outside just tools. They are a little bit like Honda. Honda sells cars, motor bikes, lawn mowers and trimmers, motors for boats, all kinds of motors for so many ICE commercial, industrial, and home owner equipment. Anything at rental shops usually has a Honda engine. Like Bosch, Honda always retains the Honda name on their products, versus another name for different division.
So when someone is tallying up car sales, they would not look at Honda, the parent company, but Honda car sales.
TTI & SBD, I would say are sort of like GM, or the GM from years ago. They sold Chevy, Olds, Pontiac, Cadillac and Saturn.
So when people look at the best selling vehicle, years ago, it was the Ford F-150, despite the fact that the Silverado/Sierra duo outsold the F-150. (I believe today the F-150 is leagues ahead of the GM duo and all other pickups)
In this equation, I look at Makita like Porsche, not because of the performance vehicle aspect, but because they have remained a solo independently owned. company (unless this has changed in recent years). They are both known for their Porsche cars and Makita power tools.
I was just trying to point out that Makita has a very large market share outside of the US. Although the US market is big, it is also very crowded. I am sure that they consider the US market when developing and marketing power tools, but I am also sure that they look at the Euro, & Asian markets more, seeing that is where their biggest sales are for them.
**** BTW, I do not know for 2023, but somewhere around 2005-2010, and probably many years following, the largest MFR of ICE was Honda, could still be today.
Rog
Porsche is not independent; they are owned by VW, the world’s largest auto group
Franco
Porsche and Volkswagen have had a close relationship for maybe 100 years. I remember the Porsche 914, late 60’s early 70’s, many thought it was cool but naysayers always would point out it had a VW engine.
Anyway, I had always heard on shows like Motorweek and in magazines like Motor Trend, Road & Track, and others that Porsche was independently owned. I did a quick Google, and as you say, VW did buy them in 2012.
There are not many independent car MFR’s left, Tesla, Subaru and a couple of others. I liked Porsche for my analogy because they made cars, and only cars (I am sure if someone scours the web maybe Porsche took a shot at something else) is what they are known for, just like Makita.
Raycr
Porsche tried to raise capital to buy VW . VW got mad and bought Porsche instead. There still was some family relations between the companies before hand hand.
TonyT
Porsche/VW is more complicated because while Volkswagen AG might own Porsche, Porsche Automobil Holding SE owns a controlling share of VW!
Note that the German state of Lower Saxony also owns a good chunk.
Ken
Makita has been my brand of choice for personal and corporate use for 20 plus years. I am now finding it harder to find their tools locally and when I do they are often substantially more than competitors. I have found it necessary to buy tools from Milwaukee and Flex to remain on schedule. Personally I feel management may be to blame for Makita’s woes. We really don’t need twenty different saws (a boast of how many tools are available on a platform) but we do need things like battery nailers that work and a framing nailer is so far past due that it has become a joke. Raising prices isn’t a long term strategy for success when your prices are higher than comparable tools from competing brands (and of course a lot of items for all brands are coming from the same place, China). A case in point, today I was searching for an edger attachment for my personal XGT trimmer. $242.00 for a piece of aluminum tube with a wheel and a blade. The same item is half the price for Milwaukee, Echo, and Husqvarna. Cost matters to us all and to my bottom line. It seems everyone has lost sight of what reasonable value means. Makita needs to deliver tools at reasonable prices, on time and with at least comparable features and tools needed by professionals and consumers.
Steve L
I think Makita and Bosch are losing market share and face large challenges.
Back when tools had cords and I bought Makita, Bosch or Dewalt depending on which I thought had the best mix of price and performance. Later I added Festool when I thought their tool (guide rail based or domino) had unique features.
Batteries changed the playing field for me. I bought a Bosch 12V drill/impact set but everything else was Dewalt. Now M12s are creeping into my collection.
Makita and Bosch could have had me for cordless but they didn’t strike me as having the best mix of cordless price and performance.
DanFromMass
I work on large construction sites daily; hard to recall the last time I saw someone show up with Makita tools.
The brand seems to be rapidly declining in popularity.
Ian
What do you see most regularly? Any clear winners or driven more by specific type of work?
Saulac
Unfortunate. Does not seem to have a strategy, at least in NA. They cited the lower demand from the stay at home…but their distribution has never seemed to arm directly to the DIY/homeower…and then the economic…but constructions do not slow down that much…Seems like their NA operation is operated by MBAs who want to talk economic than trades and tools.
I think they still have premium products, but they can not demand premium prices like Red.
Munklepunk
They have a decent homeowner line outside North America. It’s called the G line, I think.
JMG
I find myself curious about how much of the loss could be attributed to the launch of the XGT platform and if bonuses were paid to top company executives during the period of posted losses.
Saulac
Agree even though I can’t remember of my head XGT is which platform, which illustrate the point, I guess. Why they have to go 18vX2 and 40v only track saws, while the are so many 18v track saws from other brands now.
Moose Kahrs
The constant price increases aren’t helping anything. Few weeks ago I needed a new corded jigsaw – looked at the 6amp Makita in depot for $129. Went back last week to buy and wowzers… now $159?! Had second thoughts & walked out. Two days later I found another retailer with the Bosch js365 on sale / clearance for $98. I’d have kinda preferred the Makita but a 20% plus price hike is hard to stomach.
Jim Felt
I thought they lost their mojo when they didn’t really follow up from their earliest cordless lead with 9.6v stick NiCads in the ‘90’s.
Maybe they share dopey NA distribution/marketing/product introduction skills with Bosch?
Remember Plymouth, Edsel or Oldsmobile?
DanFromMass
Haha.
Porter Cable, Bosch and Makita have definitely become the Pontiac, Oldsmobile and Plymouth of the tool world.
They work, but next to nobody is actively seeking them out.
fred
In the early 1970’s Oldsmobile was the #1 selling brand in the USA. You have to keep reinventing yourself and really understand your competition and changing markets if you want to stay relevant. Today’s darling can easily become tomorrow’s bum. What marketing “geniuses” and management “gurus” learn in business school may not work consistently and/or forever. Tom Peters – the wunderkind management guru for my generation – was wowed by the success of Peoples Express Airlines and cited their management style as a way to achieve it. What they did sure worked for them while it worked – until it no longer worked. They lasted a mere 5 or 6 years.
Tony
I personally
Love makita because they are much easier to repair ur able to buy the individual parts compared to dewalt or Milwaukee where you have to buy the entire part together for a swap because everything is glued down or bonded with some type of epoxy … but i do see that makita lacks on some needed tools like Milwaukee currently has
Steve
1st cordless set I bought was Makita. Really didn’t like they way they felt in my hand so I returned them and got some M12 stuff.
M12 was cheaper any ways.
I have no idea why any corporation stays in California these days? I bet they could have avoided all the other cuts had they simply shuttered their CA locations.
And for those of you that wonder – as someone who delivers the construction goods to job sites – I can tell you that volume is seriously down and the only new projects are those that were on the books last year, and government jobs.
And even the government jobs will be gone once the 2021/2022 tax money from the fed is spent.
The whole industry is awaiting the other shoe to drop and so no one wants to spend any more than absolutely necessary.
Franco
I have about 30 or more M12, and they do feel nice, but are also 12v.
I personally find that between M18, Dewalt & Makita, [in general] Milwaukee M18 are the clunkiest, Dewalt in the middle and Makita usually are the ergo tools of the 3. That they can screw a couple less 3″ screws in 90 seconds, I don’t care.
Overall, they are the best. I have plenty of Dewalt and Milwaukee, and they are also good, but I prefer Makita.
Milwaukee, usually wins most of the speed/power and whatever tests, but while 10 years ago this might have been something to consider, today, any decent brand’s tools will easily cut, drive fasten or do more than what is necessary.
Dare I say it, Milwaukee seems to be the brand that people get because they have….you know….something else that is small! 🙂
Nolan+B
I have loved Makita for a long time but all of my main tools now are Milwaukee. I just couldn’t justify the high prices of Makita and now they are even higher!
Jason
Here’s my theory on the big shifts I’m cordless market share:
Makita owned it early with the 9.6v, then Dewalt 18v XRP was king due to the power and first large platform.
As Milwaukee invested in Lithium Ion and brushless, Dewalt was switching to 20v max which gave them the perfect window to steal market share. Dewalt had also done all kinds of voltages all the way up to 36 and Milwaukee and Makita were streamlining at 18 and 12v.
At that time Makita had some nice light weight tools but Milwaukee was churning out specialty tools like hydraulics and electrical/plumbing tools.
Makita became known as a lighter more ergonomic tool while Milwaukee became known for more power and capability.
What really killed Makita in the arms race is when 9ah and 12ah batteries came out allowing Milwaukee to power larger tools and Dewalt launching flexvolt. Makita was stuck with (I think) 6ah batteries at the max, so any given tool required x2 to match up runtime with a 12 from red or yellow.
My guess on what happens next: Milwaukee and Dewalt are pretty solidly the big 2 especially with their breadth of line across so many categories. Milwaukee is in Depot and just about every independent hardware store. Dewalt is in Depot and Lowe’s and a lot of independents. Makita I just don’t see much outside of Depot and some plumbing supply houses. I’d guess 2/3 of all pro market share in the US.
The others fight it out for the other 3rd combined. Maybe Flex keeps coming out with more stuff and challenging them the way Ego took the outdoor world by storm. If those 2 were on the same battery platform that would be big.
Ted
The first battery tools I bought were makita ones. For awhile it was all I had. Then when I started to develop the collection of the baisc general use tools, (drill, impact driver, sawzall, circular saw, etc) and I was starting to look for more task-specific tools such as a jigsaw or a hammer drill, or impact wrench, I started buying dewalt and milwaukee. Why? Because the prices of these tools from makita was way higher and they had less options. Plus another reason I stopped buying makita is because they dont have any high output batteries like the other brands do, makita stops at a 6ah meanwhile dewalt has a 15ah.
Do I still want to buy makita tools? Yes because they are no doubt a quality tool and I do like the teal blue color. Will I buy more in the future? Probably not very likely now that I have expanded into the M18 and dewalt 20v.
Emilio+Gonzalez
Too many high wage jobs for Makita USA. They should start with upper management positions. Inflation has cost sales and with higher prices it won’t help.
eddie sky
Makita reminds me of Subaru where they had their loyal followers/owners. And their product was so good, that they would only replace their owned goods every 9-10 years. I suspect with Makita, that most are saturated with them and not needing a new one. And that Makita was late (still is) replacing all their line with XGT packs. There was some confusion, IIRC, a few years ago here too. Why offer two items that are the same, but one with the XGT pack. And how many here, like the other colors (Purple) that are available in Japan market (not US)?
I have a Makita tracksaw (corded) and Makita AVT Recip Saw (corded). They work fine and sure, I would love to have had the XGT version but that was 3x the price at the time OR not available as cordless at the time.
I expect more layoffs at other companies. And sadly, I feel like groundhog day with the recession, housing, banks, shootings and greed in the news. All we need now, is a war… oh wait.
Raycr
Their continuing price hikes are even outpacing inflation and killing their sales. They are putting themselves in a downward death spiral.
Indirect costs like management that don’t add to production of product must be cut to halt decline in sales from never ending price hikes.
Workers producing product should be the last to go. The launch of their big volt line was a cash drain with limited payback to date. That was another doozy from management.
BobBrown
Makita tools are very good quality but the company is old-fashioned and highly inefficient. IT systems from the 1980s, ineffective supply chain, outdated management culture, and many completely inept expat Japanese managers running local organisations. The XGT range launch was a complete mess and customers struggle to understand the various battery eco-systems. If it wasn’t for the favourable Yen exchange rate, the company would have posted a disastrous financial result for their last financial year. At a time of consumer and professional user financial stress, Makita has raised their pricing which is making even hardcore fans question their purchasing decisions.
Let’s see if Makita can survive through the current economic climate…