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East Harlem Leaders to Confront Costco About Layoffs

By DNAinfo Staff on February 1, 2010 1:59pm  | Updated on February 1, 2010 1:52pm

The newly opened Costco in East Harlem has laid off 160 workers.
The newly opened Costco in East Harlem has laid off 160 workers.
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Flickr/Racked NY

By Jon Schuppe

DNAinfo Reporter/Producer

MANHATTAN — East Harlem officials will face Costco representatives Tuesday in their first meeting since the big-box retailer announced layoffs at its new East 117th Street outlet last month.

The officials want Costco to tell them how many of the 160 people who lost their jobs live the neighborhood, one of Manhattan’s poorest. They also want the company to find ways to rehire those workers.

“We want to first understand what happened — how they fell so short of their business projections that they had to lay off 160 people two months after they opened,” Community Board 11 Chairman Matthew Washington said. “We also want to reaffirm their commitment to the community.”

The Tuesday afternoon “debriefing” will include discussions on wage subsidies offered by the city’s Human Resources Administration, officials said. Members of CB 11 say they’ve come up with a couple ideas for Costco to take advantage of the subsidies, which are part of a federal job-stimulus initiative and can cover six months of pay for people who qualify.

The HRA has already started identifying which of the 160 qualify for the subsidies, and there aren’t many. So local officials have asked the HRA to loosen their criteria.

A Costco representative did not immediately return messages seeking comment.

The East Harlem store opened to citywide fanfare on Nov. 12. It was the first tenant of East River Plaza, a new shopping behemoth near the FDR Drive. The developer worked with the community board and a non-profit job-training organization to make sure people who lived in East Harlem would be among the new hires.

The developer agreed that Costco would try to hire 60 percent of its workers from East Harlem. In return for that and other promises, the community board agreed to allow Costco to make overnight truck deliveries.

That agreement wasn’t legally binding, but was important to a neighborhood with a 17 percent unemployment rate and where a quarter of residents use food stamps.

Costco, which operates 566 warehouse stores worldwide, reported that its global earnings in December had increased 11 percent, to $8.26 billion. But the 105,000-square-foot East Harlem store, which is about half the size of its typical outlet, ended the month with disappointing numbers. Costco cited those figures as the reason for the layoffs.

Officials have said that they hope sales will improve when Best Buy, Marshalls and Target all open stores at East River Plaza later this year.