Hallmark cares enough to send the very best ... jobs to China

Everybody knew what the e-mail meant. It went out last fall to employees of the Production Art Division of Hallmark Cards. It said that manager Lee Burner had scheduled a mandatory meeting for the next day. Somebody from HR would be there.

Production artists were told to report to a conference room in the Rice Center, a section on the south side of Hallmark's Crown Center headquarters. The Rice Center is often the place for fun times at Hallmark, where the company hosts motivational speakers, including Ami James, a tattoo artist from Miami Ink. But the employees figured that some wouldn't return to their jobs at the end of the day.

Burner, who didn't return phone calls from The Pitch, is an upper-level manager with a reputation as a man willing to wield the ax. In early 2007, he warned the Production Art Division that some positions might be cut or that the department itself could disappear. "We will be a smaller company in the next two or three years," he predicted at a meeting last spring, according to an employee who was there.

The meeting in October was supposed to mark the end of Burner's reorganization of the division. He had already spent three months analyzing each position. But Hallmark employees often joke about how change happens slowly there — sometimes giving the example of how the Kwanzaa line took years to develop — and so far, nobody had been fired.

Burner's presentation in the Rice Center included a slide show. At one point, a pie chart revealed the department's new job titles. Burner breezed over the slide and was about to continue when somebody shouted a question.

"There's no part of that pie that says 'production artist' anywhere. Where's our portion?" the employee asked, according to an artist who was there that day.

"Well, we don't know right now," Burner replied.

"Are there going to be layoffs?" the employee asked.

"Well, we can't say," Burner answered.

By the end of the presentation, Burner had revealed the real point of his speech. The artists in the Production Art Division would no longer be working on art. The creative portions of their jobs would disappear. No longer would they be working on the designs of cards, party supplies or novelty items. Now they'd be called "print production technicians," and instead of designing artwork, they would only be checking to make sure that outsourced artwork was ready for printing.

"It essentially becomes almost pushing-a-button work, with no creative portion," one of the department's artists tells The Pitch. "When we applied for these jobs, we had to turn in a portfolio and show we were artists. Now there's no creativity."

Hallmark has been outsourcing its workforce overseas for the past decade. A company that once was synonymous with Kansas City now has a shrinking local staff. Still owned by the Hall family, the private company doesn't have to report layoffs. But according to a company spokeswoman, Hallmark has lost a quarter of its workforce since 1999.

Hallmark blames the layoffs on competition, largely from the Internet and e-mail. But the company is far from suffering. On March 31, Hallmark reported reported $4.4 billion in revenue for 2007, up 8 percent over 2006. The company has reported at least $4 billion in revenue per year since 1998. Hallmark won't release its profit numbers, but a spokeswoman says the company had double-digit growth last year in its earnings.

Outsourcing and job cuts may seem normal for corporate America, but Hallmark founder Joyce Hall created his company with the idea of valuing his employees over all else. Hall protected every employee during hard times — even through the Great Depression — until he retired in 1966. The company mantra, still printed on cards and posters given to employees over the years, promises "That the people of Hallmark are our Company's most valuable resource."

The Pitch spoke with about 30 current and former employees over a three-month span. Not all of them had bad things to say about Hallmark. Some lauded the company's sabbatical program, its "creative renewal days" and its willingness to pay for employee education. In fact, many of those who have been fired or pushed out still say it's a great company that values creativity and knows how to inspire artists.

But most spoke of an environment where the threat of layoffs is constant. Where older workers fear their age might cost them their jobs. Where corporate-sounding terms such as "personal improvement plans" have replaced the family atmosphere.

James Hamil remembers what it was like to work at Hallmark when Joyce Hall treated his employees as the company's most important asset. Hamil hasn't worked at Hallmark for more than three decades, but he still speaks of it as if he were talking about an old friend — especially when he tells a story about the day Hall bought him lunch.

After 15 years in Hallmark's art department, Hamil decided to go out on his own in 1973. Hamil wanted to see how he could do selling his watercolor paintings while still freelancing for his old company. A few days after he quit, he came back to the downtown office for a meeting and decided to take a late lunch in the Crown Room, a 585-seat Hallmark cafeteria that's famous for egg-salad sandwiches, cowboy cookies, Thanksgiving turkey dinners and company gossip.