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: HelloFresh to close California facility, lay off more than 600 workers

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HelloFresh SE, which touts itself as the world’s largest meal-kit provider, is laying off more than 600 workers and shutting down its production facility in California, which a spokeswoman explained was because the plant is too outdated and the lease was due to expire soon.

The permanent closure means the loss of 611 jobs, from managers to maintenance personnel to production associates, according to a letter HelloFresh
HFG,
+1.25%

HELFY,
-0.38%

sent the California Employment Development Department. The letter, dated Oct. 10, said the plant will close Dec. 11.

A spokeswoman for the company said Friday that the decision to shutter the plant was made after “an extensive analysis” of HelloFresh’s production network. The Richmond, Calif., plant was too old, had an inefficient footprint and outdated refrigeration systems, she said. The lease at the facility, which is about 20 miles northeast of San Francisco, was set to expire in early 2023.

“HelloFresh will focus its efforts on its newer, more efficient sites and shift the production of EveryPlate to our other distribution centers,” the spokeswoman said.

She also said the company will help laid-off employees with financial support, outplacement support and relocation.

Last November, employees at the Richmond plant held a union vote after some of them raised concerns about working conditions there, especially after the coronavirus pandemic boosted demand for meal kits — though that demand has now waned. They would have been the first workers in the meal-kit industry to unionize. But in the end, the vote tally was 289-198 against unionizing, according to media reports.

The U.S.-based segment of HelloFresh, which is based in Germany, opened a facility in Phoenix last year, which is now the closest plant to the West Coast, the company spokeswoman said. HelloFresh has several segments throughout Europe and one in Australia.

HelloFresh’s U.S.-traded ADRs have declined 72.7% so far this year, as the S&P 500 index
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-1.73%

has fallen 23%. Worth nearly $20 billion at its peak in August 2021, the meal-kit company now has a market capitalization of roughly $3.6 billion, according to FactSet.

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