After years of uncertainty, Cabela’s employees in Sidney, Nebraska, finally got notice this week from Bass Pro Shops: For many, the end is near.
Employees at the former headquarters have until March 1 to accept an offer from Bass Pro that would let them leave on their own accord and receive bonuses of up to $40,000, according to a letter sent to employees and obtained by The World-Herald.
With that, Bass has begun the process of clearing out Cabela’s former home office, something that people in the town of 6,800 have worried about since the outdoors retailer found itself in a tussle with a Wall Street investor back in late 2015.
“This will be a mass exodus in Sidney,” a headquarters employee said in an interview on the condition the employee not be named. “This is what people have been waiting for.”
Bass Pro finalized its $5 billion purchase of Nebraska-based Cabela’s last year. Now, the company is faced with the task of eliminating duplicate functions as the two companies combine. The new headquarters will be in Bass Pro’s home of Springfield, Missouri.
The offer to Cabela’s headquarters employees includes two weeks of pay per year of service at the company, plus a hefty bonus, according to the document.
Sidney headquarters employees who are over 50 years old, with a minimum of 10 years of service, would get two weeks of severance pay for each year of service at the company, plus a $40,000 bonus, if they accept the offer. They would also get a lifetime discount card for Bass Pro and Cabela’s stores.
Employees under 50 or with fewer than 10 years of service would get the severance offer and a $20,000 bonus, plus discounts at the stores for the next 10 years.
“These voluntary programs, which will expire March 1, 2018, are above and beyond what Outfitters will receive in future severance programs,” the letter said, referring to Cabela’s employees.
A Bass Pro spokesman would not say how many people were affected, but he confirmed that only Sidney headquarters employees received the offer. Cabela’s also has offices in Kearney, Lincoln and Denver.
The letter said a $20 million fund to enhance normal severance benefits had been set up, so doing the math, it’s likely applicable to all or most of the employees at the headquarters.
The town about six hours west of Omaha already has been hit hard by the sale of its top employer. Many people already have been laid off or have quit. Sidney’s housing market is flooded with homes for sale, and many already are declining in value.
One employee estimated that about 800 people are left at the former headquarters. That’s down from at least 1,200 three years ago. Cabela’s once employed about 2,000 people total in Sidney.
In January, Bass Pro Chief Executive Johnny Morris challenged former Cabela’s executives and owners who benefited financially from the sale of the company to donate some of that money toward a severance fund for average workers.
The letter to employees offering the buyouts, which was dated Feb. 15 and signed by Bass Pro President Jim Hagale, said that Morris’ challenge received “minimal positive response.” Morris at the time said Bass Pro had already committed an additional $10 million toward the severance fund, and that he would personally match all of the donations, up to $10 million.
“Irrespective, Johnny has decided to firmly commit to contribute the full amount of his $10 million challenge,” the letter said. “This most recent commitment, when added to the $10 million previously committed to enhance severance, results in a total of $20 million of incremental funding to help support dislocated team members.”
The letter says “a significant portion” of that money is being used to provide for the voluntary programs outlined in the letter.
It also promises that, should executives or owners contribute to the severance fund in the future, employees who accept the offer would receive their fair share of that money, too.
“We remain hopeful that those who did not choose to directly participate in the challenge to support Sidney Outfitters will join us and the City of Sidney and the State of Nebraska to help create other meaningful opportunities for new job creation within the community of Sidney,” the letter said. Morris has offered to lease out unused office buildings to another employer for $1 per year.
The Cabela’s employee who asked not to be identified said the offer is more generous than employees had hoped for. The standard severance program does not include the bonus, the employee said.
Erik Gordon, a professor at the University of Michigan’s Ross School of Business who studies mergers and acquisitions, said the Bass Pro offer is extremely generous. Its size likely reflects the contribution from Morris, he said.
“Most people would rather still have the job they liked, but as severance goes, it is the best I have ever seen,” Gordon said. “The acquirer is not obligated to offer packages like that.”
The letter notes that Remington Arms Co., a Cabela’s and Bass Pro vendor, declared bankruptcy this week, a sign of the struggle outdoors retailers have faced over the past few years.
“The reality is that Cabela’s retail business continued its downward spiral through 2017, with the company reporting very significant losses for the year just ended,” the letter said. “This type of performance is obviously not sustainable and requires major and immediate corrective action.”