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In February 2011 Powell's announced the layoffs of 31 employees, over 7% of its unionized workforce, in “response to the unprecedented, rapidly changing nature of the book industry". It was the first round of layoffs since the store's workers formed a union. A union representative said that Powell's had reduced its workforce by about 40 in the prior year through attrition, but felt that layoffs were still necessary because of a decline in sales of new books and a rise in health care costs.<ref name="NY Times Arts Beat">{{Cite news |last=Bosman |first=Julie |date=February 9, 2011 |title=Powell's Books Announces Layoffs |work=[[The New York Times]] Arts Beat blog |url=http://artsbeat.blogs.nytimes.com/2011/02/09/powells-books-announces-layoffs/ |access-date=2011-02-09}}</ref>
In response to the [[COVID-19 pandemic]], Powell's announced the closing of its five locations and the termination of nearly all employees in mid-March 2020.<ref name="latimes2020">{{Cite news |last=Pineda |first=Dorany |date=March 18, 2020 |title=Powell's, Portland's beloved indie bookstore, will lay off most workers |work=[[Los Angeles Times]] |url=https://www.latimes.com/entertainment-arts/books/story/2020-03-18/powells-portlands-beloved-indie-bookstore-lays-off-most-workers |access-date=March 19, 2020}}</ref> The letter released by CEO Emily Powell on March 17, 2020, did not disclose the exact number of employees that were laid off. However, roughly 85% of the 400 members of the company's unionized workforce were terminated.<ref name="oregonlive2020">{{Cite news |last=Rogoway |first=Mike |date=March 16, 2020 |title=Powell's expands coronavirus layoff, warns it will be 'several months' before normal operations |work=The Oregonian |url=https://www.oregonlive.com/business/2020/03/powells-expands-coronavirus-layoff-warns-it-will-be-several-months-before-normal-operations.html |access-date=March 19, 2020}}</ref> More than 100 former staffers were then rehired to fulfill a large surge of online orders, but the union pointed out that only 49 were union-represented, and that the rest were managers who were now doing front-line work normally done by represented employees.<ref name="auto1">{{cite web |url=http://www.powells.com/featured/communitymessage |title=Archived copy |website=www.powells.com |access-date=15 January 2022 |archive-url=https://web.archive.org/web/20200329201856/http://www.powells.com/featured/communitymessage |archive-date=29 March 2020 |url-status=dead}}</ref><ref name="auto">{{Cite news |title=Powell's recalls some workers to sell books online during coronavirus outbreak |publisher=The Oregonian |url=https://www.oregonlive.com/business/2020/03/powells-recalls-some-workers-to-sell-books-online-during-coronavirus-outbreak.html}}</ref> In July 2020, Powell's announced that the store and kiosk in the [[Portland International Airport]] would remain closed permanently.<ref name="airport">{{Cite news |author=KATU Staff |date=2020-07-27 |title=PDX airport Powell's Books locations close permanently |url=https://katu.com/news/local/pdx-airport-powells-books-locations-close-permanently |access-date=2021-07-13}}</ref>
As Powell's gradually began re-hiring staff beginning in April 2021, former employees were forced to apply for open positions as new employees. Powell's claimed that their right to return to their old jobs had expired, and an agreement to extend those rights (and maintain previous pay levels) had not been reached between Powell's and the union. The majority of hired staff have been previous employees.<ref name="rehiring">{{Cite news |last=Rogoway|first=Mike |date=2021-06-03 |title=Powell's, union remain at odds over bookstore's rehiring practices |url=https://www.oregonlive.com/business/2021/06/powells-union-remain-at-odds-over-bookstores-rehiring-practices.html |access-date=2021-07-24}}</ref>
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