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Musician's Friend lays off more

Guitar Center completes takeover, reducing local staff to 132 employees

Musician's Friend laid off a dozen full-time employees Tuesday at its Medford headquarters, shifting the work to its new parent company's California offices.

The jobs were eliminated when Guitar Center, which bought Musician's Friend in May, completed its takeover of operations at seven of Musician's Friend's nine retail stores.

Rob Eastman, chief executive of Musician's Friend, said the shift of retail operations to Guitar Center was part of the purchase deal and eliminated the need for numerous positions in the accounting, marketing and merchandising departments based in Medford.

Guitar Center, based in Agoura Hills, Calif., is the nation's leading retailer of musical instruments and equipment with more than 60 stores. Seven large Musician's Friend stores have been converted to Guitar Centers. The smaller stores in Medford and Eugene will continue to use the Musician's Friend name, but control of the stores will be shifted to Guitar Center within the next 30 days.

Eastman said the changes will allow Guitar Center and Musician's Friend -- the leading catalog and Internet instrument retailer -- to do what they do best.

They are the retail experts, he said. We are going to grow our core business and they are going to grow theirs.

Eastman said the company tried to make the needed cutbacks through attrition but was forced to lay off the 12 employees in what he called a one-time cutback. Other jobs were eliminated through attrition, though Eastman said he was unsure how many.

The layoffs are the second reduction this year and leave the company with 132 employees in Medford. In February, Musician's Friend laid off 68 workers when it closed its Medford call center. In early 1998, Musician's Friend employed about 270 people in the Rogue Valley.

Despite the reduced local employee count, Eastman says the company will remain in Medford and grow here.

It's still a good situation, he said.

Musician's Friend will continue to run its Internet and catalog businesses from Medford as a subsidiary of Guitar Center.

The portion of the business mostly tied to the Rogue Valley is the Internet business, since orders from — are processed at the Medford headquarters. Eastman said that portion of the business is growing quickly, which will likely mean that the company will be hiring more Rogue Valley employees down the road.

Much of the catalog business is handled by the company's new call center in Salt Lake City and its main distribution center in Knoxville, Tenn.

Next month, Eastman said, the company will reopen a distribution center in Medford to fill catalog and Internet orders. The center will run out of the retail warehouse that has been serving stores in the region; that task will now be handled by Guitar Center.