Valpak, the Largo direct-mail operator best known for its ubiquitous blue envelopes, is cutting 79 jobs, or about 6 percent of its work force.
And with sluggish demand forecast for next year, the company acknowledged it may have to forfeit hundreds of thousands of dollars in state and local tax incentives connected with building its $220-million printing facility in St. Petersburg.
Valpak is ending the second of six years in a tax-rebate program worth $610,000. To keep receiving rebate checks, it must retain 1,000 jobs, at least 100 of them newly created. The job cuts revealed Wednesday will bring its area staffing to about 1,300 in St. Petersburg and Largo.
Valpak spokeswoman Marsha Strickhouser said the company hopes to qualify for the rebates next year, "but it's uncertain. … We really don't know what's going to happen in this next year. How will the economy go?"
Last month, Valpak received its first tax rebate of $37,125. For keeping its required work force levels during 2008, it expects to qualify for another rebate next year, this one for $74,250.
The company said it remains profitable, but job cuts — across all levels — were necessary because it felt the same market pressures as other advertising companies and those in the direct marketing industry.
"This was a very difficult decision for us, but given the economic forecast, it is necessary to ensure Valpak performs well during this current recession," said Greg Bicket, Valpak's chief executive.
Employees are being offered severance packages that range from eight weeks to a maximum of 52 weeks of pay, along with career-transition services. Career counselors were available Wednesday.
Cox Enterprises Inc., Valpak's parent company, has been seeking a buyer for the Valpak operation.
Jeff Harrington can be reached at jharrington @sptimes.com or (727) 893-8242.