Know Your Gear Podcast with Phillip McKnight

Episode 436: “Another Large Guitar Company does Lay Offs”
Date: November 3, 2025

Episode Overview

In this episode, Phillip McKnight tackles the breaking news that Paul Reed Smith (PRS) Guitars recently implemented significant layoffs. He discusses the official statement from PRS, analyzes what this means for the industry, and puts it in context with recent downturns and labor reductions at other major guitar companies. In classic "Know Your Gear" style, Phillip also fields a wide range of listener questions, covering topics from guitar buying strategies and repair tips to industry anecdotes and factory visits, all while maintaining his trademark candid and engaging approach.

Main Theme: PRS Guitars Layoffs and Industry Trends

Discussion Breakdown & Insights

1. PRS Layoffs—The Facts & Official Statement (00:00–14:00)

• Phillip shares that rumors of PRS layoffs swirled during last week’s livestream.

• Multiple friends informed him of about 72 layoffs at PRS—estimated at 10-15% of their staff.

• Rather than leveraging personal contacts, Phillip reached out through official channels and reads PRS’s official public relations statement:

  “We made a limited workforce adjustment to align with our current business needs. This decision... was not made lightly. We provided support resources to those impacted and remain focused on our team. Staffing changes should in no way affect our ability to serve our customers with distinction. Out of respect for everyone involved, we’re not sharing further details.” (05:30)

• Context: G&L Guitars recently furloughed, then laid off their entire staff and possibly closed, following similar actions by Fender during the post-pandemic downturn.

2. Industry Patterns: Boom, Bust, and Realignment (14:00–21:00)

• Phillip places the PRS move within a historical trend: after 2020’s guitar “boom,” demand fell and manufacturers, starting with Fender, started reducing staff.

• He recalls a mirrored scenario after the 2008 recession.

  “PRS was able to hold back for three years... because they’re a smaller company. They can try to keep their employees along longer.” (17:45) – Phillip

• He observes “a glut of guitars” online and in stores, and explains this overproduction is being addressed by companies scaling back, likely preventing a crash in guitar prices.

3. Why Guitar Prices Staying High Is Counterintuitively Healthy (21:00–28:00)

• Phillip explains that when prices fall too far, buyers lose confidence and stop buying—guitarists need to trust that their gear will retain value.

  “When the prices get too low, then no one buys. Everybody gets freaked out. And plus then no one can sell to buy. And that’s a bigger problem.” (24:40)

• By adjusting production downward, companies hope to maintain price stability and consumer confidence.

4. “The Candy Bar Analogy” for Business in a Shrinking Market (28:00–30:30)

• Phillip shares business wisdom from past recessions:

  “When you give a kid $10 and tell him to get candy, he gets 10 candy bars. Next time you give him $5, he gets 5. With $1, he picks his favorite. In all three scenarios, he bought his favorite. In a boom, everyone gets to sell a candy bar; in a softer market, only the best survive.” (29:52)

• Advice to businesses during slowdowns: focus on being the “favorite candy bar.”

5. Tone Check: Not Doom & Gloom (30:30–35:00)

• Phillip resists sensationalizing the news, emphasizing cycles are normal and PRS was transparent.

  “It’s really easy... to go ‘doom and gloom’ for clicks. But I think PRS being very forthcoming—this is a realignment.” (31:30)

Key Discussion Points & Listener Q&A

PRS & Industry Topics (35:00–49:00)

• Industry Deal Example:

  • Phillip casually receives multiple discount offers on Reverb during the podcast:

    “I just got an offer for a Music Man Majesty 7… it’s $5700, and the offer is $4700—$1000 off.” (37:40)

• Limited-Edition Guitars & Flipping:

  • Discusses Gibson’s $20k "Back to the Future" guitar and flipping culture:

    “Companies want stuff to be bought and flipped. There’s a great video… how many industries are making unobtainable product that people buy and flip.” (53:30)

Listener Technical & Gear Questions

Floyd Rose Manufacturing in the US (49:00–53:30)

• New US-made Floyds are likely backordered because the new North Carolina facility is retooling.

Cleaning Nickel Hardware (53:30–56:00)

• Phillip hasn’t used deoxit to clean nickel, but promises to test it and report back.

Threaded Barrel Saddles on Jazzmasters (56:30–57:30)

• No real concern for string breakage unless issues present themselves.

Supro Guitars (49:00)

• Short answer: likes Supro, especially the amps, but hasn't done a deep dive.

Soldering Practice/Modding Inspiration (58:30–1:00:00)

• Phillip encourages investing in tools and learning guitar tech work for great value.

Podcast Notables, Quotes & Memorable Moments

The Store Tour Shoutout (1:26:00–1:35:00)

• Phillip appreciates The Joe Wentz Project YouTube channel for their store walkthroughs.
• Reveals how YouTube notifies him when other creators mention his name, leading him to discover new content.
• Comments that, no matter how big the channel gets, getting access and invites from companies and stores remains a constant uphill battle.

  “No one’s knocking down my door going, ‘Hey, we’d love you to do content for us,’ I’m still fighting for content every day.” (1:33:30)

Cortek Factory Tour Insights (1:10:00–1:21:00)

• Recaps “How You Make a Million Guitars”—biggest lesson is it’s not one giant factory but a campus comprising 10 separate factories, each for different brands.
• Noted brands he personally saw at Cortek: Fender, Squier, EVH, Sterling, Jackson, Charvel, Ibanez, Strandberg, PRS SE.
• Explains the risks and logistical challenges of forecasting and manufacturing in Asia, and why excess stock is being discounted.

The Korn Story—Not Ska! (1:49:40–1:55:30)

• In a humorous detour, Phillip tells of the first time he saw Korn live, thinking they were a ska band, and ending up in a surprise mosh pit:

  “I thought, oh cool, ska—didn’t say it, just thought it... [then] the singer comes out playing bagpipes, and everyone loses their sh*t. At this point, I figured out they're not a ska band.” (1:52:00)

Guitar Market Volume and Affordability (2:14:00–2:21:00)

• Guitars are produced by the tens of millions each year globally—not just millions.
• North America’s largest guitar manufacturer is Godin, followed by Fender, then Gibson, Heritage, Taylor, Martin, Kiesel, and others.
• Guitars are cheap by historical/adjusted-for-inflation standards, even if prices have risen recently:

  “Guitars are rock bottom cheap across all, all boards… you can almost buy a PRS SE for what a [1960s] Sears Silvertone cost with inflation.” (2:19:20)

On Partscasters and Modding Fenders (2:30:00–2:34:00)

• Explains why a Fender “partscaster” will almost always be worth less than the sum of its original parts, due to collector preference for all-original instruments.

Useful Timestamps for Key Segments

• PRS Layoff Discussion Begins: 00:30
• Reads Official PRS Statement: 05:30
• Industry Layoff History & Analysis: 14:00–28:00
• Candy Bar Analogy (Business Lesson): 29:52
• Price Stability & Guitar Market Dynamics: 21:00–28:00
• Live Reverb Deals Example: 37:40
• Floyd Rose Moves Manufacturing: 49:00
• Cortek Factory Tour Reflection: 1:10:00–1:21:00
• Joe Wentz Store Tour Shoutout: 1:26:00–1:35:00
• Korn Not-a-Ska Story: 1:49:40–1:55:30
• Guitar Market Volume & Affordability: 2:14:00–2:21:00
• Fender Partscaster Value: 2:30:00–2:34:00

Standout Quotes

• On Layoffs & Realignment:

  “When stuff like this happens, although it’s horrible for the employees… when they do these reductions... you’re not going to see the guitars rock bottom price out again.” (17:00, Phillip)

• On Market Psychology:

  “Guitar players live in a special little bubble of the world where the things they buy still have value. That belief in that value makes us be a little bit more risky with our wallets.” (22:00, Phillip)

• On Guitar Manufacturing at Scale:

  “I just want to know how you make a million guitars… and if you watch that [Cortek Factory] video, I think we… well, I know how they do it. It’s not a factory that makes a million guitars. It’s 10 factories making guitars.” (1:14:00, Phillip)

• On Guitar Affordability:

  “Guitars are so cheap right now. It's ridiculous. They have gone up… but to think that guitars are not cheap? Guitars are rock bottom cheap across all, all boards.” (2:19:20, Phillip)

Episode Tone

Warm, energetic, and transparent—Phillip mixes analysis, empathy for laid-off workers, and plenty of personal anecdotes. He encourages realistic optimism and responsible gear enthusiasm, inviting everyone to learn and participate in the ever-evolving guitar world.

Final Note

Instead of sensationalizing industry changes, Phillip offers measured wisdom, business perspective, and actionable advice for gearheads and prospective buyers alike. If you’re looking for a nuanced take on the state of the guitar industry as of late 2025—with plenty of informative and entertaining detours—this episode of Know Your Gear delivers.

Subscribe to the Know Your Gear YouTube channels for more in-depth gear talk, factory tour breakdowns, and hands-on advice every week.