The Springfield, Arkansas-based meat processing company confirmed the closure of its two plants – one in Van Buren, Arkansas and another in Glen Allen, Virginia – to CNBC. The Van Buren facility with 969 workers and the Glen Allen facility with 692 employees will close on May 12, the company said.
"While the decision was not easy, it reflects our broader strategy to strengthen our poultry business by optimizing operations and utilizing full available capacity at each plant," Tyson Foods said in a statement. It added that demand will be shifted to other facilities owned by the food company. Affected employees are also being assisted in finding other jobs and offered relocation assistance to other plants.
According to a February 2023 earnings call, Tyson Foods' chicken business under-performed expectations as its operating income fell by 50 percent compared to the previous year. But the Wall Street Journal (WSJ) reported that the plant closures were just the latest in a series of shakeups in the firm.
The company earlier ousted David Bray, the president of its poultry business who had been in the position since 2021. Wes Morris, who had been Tyson Foods' president for prepared foods before retiring in 2017, took over from Bray. Prior to his ouster, Bray had been leading an effort to revamp the company's chicken business.
The WSJ said in its report that Tyson Foods "had struggled for years to hatch enough chicks and meet customer demand while paying more for labor to staff its plants and grain to feed its chickens." During the 2023 earnings call, Morris said the company can do a better job of ensuring the right amount of chickens at the right locations to meet customer demand. (Related: Tyson Foods announces 30%+ price hike for beef and pork as food inflation explodes.)
Other food companies also downsizing
The unfavorable economic situation has forced many companies to cut costs, and Tyson Foods is the latest addition to that list.
Soft drink company Coca-Cola offered voluntary buyouts to its workers in North America. Meanwhile, PepsiCo cut jobs in its North American beverage units and its Frito-Lay snack division. Maryland-based spice company McCormick also joined the fray, offering buyouts and laying off workers as part of a plan to save $75 million.
Even fake meat companies are not immune, as seen in the examples of Beyond Meat and Impossible Foods. According to CNBC, both companies "have cut more than a fifth of their workforces as demand wanes for their products and [they] look to conserve cash." Meanwhile, a February piece by the National Pulse expounded on the two cultured meat companies' woes.
Beyond Meat's shares dropped by 75 percent in the first three quarters of 2022, forcing it to slash its workforce by almost 20 percent. The job cuts impacted 200 employees. Prior to this, the McPlant Burger – the company's collaboration with McDonalds – did not gain ground and was discontinued.
Impossible Foods also suffered the same predicament, forcing it to lay off 20 percent of its workforce. The third round of cuts, which was first reported by Bloomberg, would affect around 140 of the company's 700 employees. The company defended its decision to slash jobs as part of "streamlining" its business in preparation for "hyper-growth."
Head over to FoodCollapse.com for more stories about downsizing efforts by food companies.
Watch this video of Tyson Foods declaring via a full-page advertisement that the food supply chain is breaking.
This video is from the thedeadgene channel on Brighteon.com.
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