While the company would love for us to believe that this $11 million “loss” is a real problem that justifies dramatic changes, the reality is that it’s all smoke, mirrors, and accounting tricks. MEC remains a very profitable and growing company with money to invest in new buildings and restructuring.

Last year, MEC’s “property and equipment” assets (real estate, buildings, vehicles, etc.) grew by around $18 million. They could literally operate their retail business at a loss and still be profitable. But don’t worry, the retail business is actually doing fine, despite what management says. MEC’s sales increased by $12 million while their cost of sales (mainly overhead, inventory, and wages) only went up about $2 million. So what accounts for this $11 million “loss”?

There are two major sources: “assets under construction” ($29 million increase) and “restructuring” (which cost $8.5 million). The “assets under construction” are just investments in the business that will in the future be “property and equipment”. They don’t represent loss, they represent growth and reinvestment of profit. MEC just wishes it had more of it. “Restructuring” basically consists of modernizing the online sales side of the business and, presumably, paying the “Chief Transition Officer” Nancy Blair top dollar to cook up this new round of layoffs.

This kind of deceptive bookkeeping-as-public relations foolishness is standard operating procedure in the corporate world where CEO Phil Arrata and his cronies all come from. All of this information is available in MEC’s financial statements, which are on its website – the company just assumes you’re too lazy to look them up or too stupid to understand them if you do, and instead will take their word for it when they say they’re broke and had to fire your friends

One thing from all this is clear: MEC is not laying people off because it’s losing money. MEC is making an absolute fortune. MEC is laying people off because its board of corporate executives wish it were making even more money. They put profit ahead of their workers and they should be ashamed of themselves. We, on the other hand, should be angry.