Photo company Shutterfly is laying off 150 employees in Silicon Valley and moving their jobs to the Midwest

Hilary Schneider

Shutterfly, a company that prints photos onto albums and gifts, is laying off 153 people at its headquarters in Redwood City, California.
A company spokeswoman said it's relocating some of the positions to a hub in Minneapolis, where its school photography division is based.
Shutterfly employees whose jobs are being moved, rather than eliminated, will "absolutely have the option to go with their jobs and relocate," the company said.
Shutterfly's business has struggled with the arrival of competitors and the demand for physical photos waning.
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Shutterfly, a company that sells custom photo albums and greeting cards, is laying off about 150 people at its Redwood City, Calif. headquarters as it shifts some of its operations to Minnesota, where costs are lower.

The company said in a filing dated January 29 with California's Employment Development Department that it would eliminate 66 positions and relocate another 87 jobs out of California.

The marketing and merchandising teams took the brunt of the layoffs. In Redwood City, the most common roles being slashed are designers, marketing managers, and merchandising managers, with some web developers and technical managers in the mix.

Setting up shop in Minnesota

Shutterfly is moving these departments to a small city outside Minneapolis, where one of its larger divisions is based, said Sondra Harding, senior director of communications. In 2018, the company bought a photography business called Lifetouch that does school portraits.

minneapolis minnesota

Their businesses are complementary, Harding said, with Lifetouch capturing the photos and Shutterfly helping the recipients preserve them in prints, photo albums, and gifts like calendars, coffee mugs, and plaques. Lifetouch takes photos of 25 million students a year, according to the 84-year-old company.

"They want to do more with those pictures than send home a packet to mom and dad, which is what Shutterfly does," Harding told Business Insider.

She added that Lifetouch delivers an influx of new customers who are "increasingly expensive to go out and get." It brings an average of 1 million kindergarteners into the fold annually.

Shutterfly

"If we put these two businesses side-by-side physically, we believe there's a lot more opportunity to learn from each other and think holistically about the customer experience," Harding said.

The company will continue to base corporate leadership, engineering, and support staff at the California headquarters. According to Harding, Shutterfly has about 8,000 "primarily full time" employees.

A struggling business

Shutterfly's business is largely seasonal, with orders for custom cards surging before the winter holidays. That business has waned in recent years as its "cheaper cards printed on photo paper lost out to card-stock designs from rivals," wrote MarketWatch's Jeremy Owens last year.

The demand for photo prints has also stalled as people prefer to share photos online through social media apps.

Shutterfly started trading on the public markets in 2006, and returned to private ownership last year with its sale to private equity firm Apollo Global Management Photo. In its last financial report as a public company in June 2019, Shutterfly reported a net loss of $96 million over the previous six months, with revenue of $800 million.

A few months after being taken private, the company installed a new chief executive, Hilary Schneider, who left the top job at dog-walking service Was after about a year.

Wag, which was funded by SoftBank, has laid off about 180 employees in the past year.

Some employees can leave the Bay Area to hold onto their jobs

Shutterfly employees who are willing to relocate can expect a lower cost of living and more space in Minneapolis, though the company said it's too early to know if any employees will. Shutterfly told them of the layoffs, which start taking effect on March 31, on Wednesday.

Those whose jobs are being moved, rather than eliminated, will "absolutely have the option to go with their jobs and relocate," Harding said. Shutterfly plans to add as many as 100 positions in marketing and merchandising in Minneapolis.

The company will provide a severance package and outplacement resources to those employees whose jobs are being cut, but it did not detail the severance.

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