Media Statement:
Hallmark Workforce Reduction

KANSAS CITY, Mo. (April 14, 2009) — Employees of Hallmark Cards, Inc., were informed today that the company intends to reduce the size of its U.S.-based workforce, excluding subsidiaries, by six to eight percent over the next six months. This translates to between 550 and 750 jobs out of 9,200 full-time employees in Hallmark's U.S. personal expression business.

As part of that action, the company will offer a voluntary severance program for eligible, non-exempt employees in its operations division. Hallmark anticipates as many as 350 to 450 jobs will be eliminated from the seven locations in five states that make up the operations division.

The impact of current economic conditions on Hallmark’s business, including declining consumer confidence and spending, led to this decision. Hallmark’s 2008 consolidated net revenues were two percent lower than the prior year ($4.3 billion in 2008 compared with $4.4 billion in 2007). As the recession continues, the company expects additional pressure on revenues and earnings in 2009.

To preserve critical business capabilities, the reductions will be implemented on a targeted basis and will not be applied uniformly to each division or department. This action will lead to 550 to 750 fewer jobs, across all portions of the company’s U.S. personal expression business, excluding U.S.-based subsidiaries. This includes:
– the company’s headquarters in Kansas City;
– the Kansas-based manufacturing facilities in Lawrence, Leavenworth and Topeka;
– distribution centers in Liberty, Mo., and Enfield, Conn.;
– fixture operations in Center, Tex., and Metamora, Ill.; and
– field sales operations.

There are approximately 9,200 full-time employees in Hallmark’s U.S. personal expression business. U.S.-based subsidiaries (DaySpring, Sunrise Greetings, William Arthur, Crayola and Crown Center) are not impacted by this decision. About 4,000 employees work at the company’s Kansas City headquarters.

All affected employees will be provided severance and transition assistance.

“Reducing our workforce by this many jobs is something we wish we did not have to do,” said Donald J. Hall, Jr., president and chief executive officer. “These actions are all the more difficult and emotional because of the strong and personal culture we share at Hallmark. Despite all the steps we have taken to date to avoid eliminating additional jobs, the state of the economy and its impact on our business require us to take further action.”