New Braunfels-based The Scooter Store Lays Off 220 Employees

(New Braunfels, TX) -- New Braunfels-based The Scooter Store suffered through another round of layoffs yesterday, as company executives eliminated around 220 employees across all areas of the business.

Scooter Store Senior Vice President Tim Zipp says the layoffs are part of a company-wide cost savings plan designed to restructure the company in the wake of continued changes in the Medicare industry. That includes fundamental changes in claims processing procedures and reductions in reimbursement amounts (both of which are key to the Scooter Store’s business model).

The Scooter Store has gone through some other changes in recent months, including the exit of founder and CEO Doug Harrison in March, the hiring of Martin Landon as the new CEO in July, and the expansion of the company’s national operations in the last couple of years that led to a 500 job increase locally.

Yesterday’s layoffs represent about 10% of The Scooter Store’s national workforce, leaving them with about 21-hundred employees, about 14-hundred of which are employed here in New Braunfels.

This isn’t the first time The Scooter Store has had to deal with layoffs prompted by changes to Medicare. In the early 2000’s the company let several hundred workers go because of similar issues after Medicare clamped down on industry-wide fraud concerns.

Even the Scooter Store came under investigation by the FBI over alleged false Medicare claims. In the end, the Scooter Store settled with the federal government, paying 4-million dollars and agreeing to give up about 13-million dollars in Medicare payments. Since then the company has flourished and has been named twice to Forbes Magazine’s “Top 100 Best Places to Work For” list.

As for the 220 employees that were let go yesterday, the cuts were felt across the board, from longtime managers to recently hired part-time employees. And although no notice was given of the pending cuts, Zipp says the company made efforts to compensate those they were letting go by offering severance packages and other help.

It’s unclear as of yet whether yesterday’s layoffs have any effect on the Scooter Store’s agreement with the city and its 4B Board, after they gave the company a 3.85-million dollar incentive package in order to keep the Scooter Store in New Braunfels. But that agreement was dependent on the Scooter Store creating 500 new local jobs, a goal they reached within a few short months of striking the agreement with the city.

We’ll be talking about that part of the story today at 12:30 here on KGNB with Chamber of Commerce President Michael Meek on the Inside the Chamber show. That’s at 12:30 this afternoon here on AM 1420 and streaming live online at kgnb.am.