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Arrow Electronics employees get unpaid furloughs

Arrow Electronics Inc., Long Island's largest company in terms of sales, has initiated a mandatory unpaid time-off program because of the sharp downturn in the world's economy, company officials said Friday.

Paul J. Reilly, Arrow's chief financial officer, said the program is aimed at avoiding layoffs among the company's roughly 12,700 worldwide employees. The company has about 700 workers at its headquarters in Melville.

"It's a way of buffering the impact" of the bad economy, Reilly said.

Reilly said he had information only on the company's employees in North America affected by the program. About 60 percent of those workers are affected, he said. About 50 percent of Arrow's employees are overseas and the other half in North America, Reilly said.

Under the program, affected employees must take six to 10 unpaid days off this year, depending on whether they are salaried or hourly. Not all employees are affected by the program.

The program began in January and is to run throughout this year, Arrow officials said. Reilly said employees suggested the program as a way to save jobs.

Barbara Viola, president of Viotech Solutions Inc., an information technology consulting and staffing firm in Melville, said she was taken aback when told of the program. "I think that is kind of surprising," Viola said. "The company has done well for so long."

Arrow, one of the world's largest distributors of electronic components and computing products, last mandated unpaid time off during the worst days of the technology meltdown in 2002.

Like most businesses, Arrow is battling through one of the worst economic downturns in decades. In December, the company cut about 1 percent of its jobs worldwide, citing the economic downturn.

In February, Arrow reported net income for the fourth quarter of 2008 fell nearly 40 percent, to $43.2 million, from $114 million in the same period a year before. Sales were down 7.5 percent from $4.4 billion in a year earlier.

"Macro pressures intensified through the quarter and demand has continued to weaken, impacting all markets and economies around the world," chief executive William Mitchell said at the time.

Sales for all of 2008 were $16.7 billion, up from $15.98 billion in 2007, making Arrow by far the Island's largest company in terms of revenue.

In a long-planned move, Mitchell is to be replaced at the company's annual meeting next month by Arrow president and chief operating officer Michael J. Long.

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