- TreeHouse Foods announced Wednesday that it will close its St. Louis office on June 28, according to a release. A total of 170 employees will be laid off, and their work will be consolidated into the company's existing offices in Oak Brook, Illinois.
- Costs from the closure are expected to total $7.8 million — or $0.10 per share — and will be mainly incurred before June 30.
- The decision to shut the St. Louis office comes as a part of the company's previously announced restructuring program called TreeHouse 2020, intended to cut costs and better align the private-label food manufacturer with an increasingly competitive environment.
This latest closure and surge of layoffs at TreeHouse shouldn't come as a surprise. It falls in line with a streak of shutdowns as the manufacturer has struggled to make a financial comeback.
Through its TreeHouse 2020 program, the company is working to limit costs by scrutinizing business practices, shutting down plants and getting rid of less profitable products. Last summer, the manufacturer cut 200 jobs by closing its office in Omaha, Nebraska. It also announced plans to close a California pretzel and cereal snack mix plant and a ready-to-eat cereal plant with 84 employees in Michigan. Two years ago, the company laid off 375 workers by closing plants in New York and Indiana.
Last year's Omaha office closure rid the company of an administrative office it inherited when TreeHouse bought Ralcorp, a private brands division, from Conagra in 2015. This closure shuts down another former Ralcorp office; the private-label company was once headquartered in St. Louis.
In Wednesday's announcement, TreeHouse said it was committed to a smooth transition and planned to give impacted employees separation pay and placement assistance.
"Our decision to close St. Louis was not taken lightly, and we are committed to providing employee assistance through this challenging transition," CEO and President of TreeHouse Steve Oakland said in the release. "As we streamline our organization into four divisions (from five) and build our commercial excellence capabilities, it is both prudent and strategic that we also consolidate our administrative locations."
But with continuous employee cuts, remaining staff are likely concerned about their own job security.
This St. Louis job cuts show more difficult days are likely coming for TreeHouse before anything starts to improve. The company has continued to struggle to gain its footing and improve its bottom line. After abrupt executive turnover in late 2017, when former chairman Robert Aiken left after just three months, the company had to lower its guidance twice and got off to a rocky start last year that has only continued. Its new CEO has remained optimistic about turning the company around with its 2020 plan, but that might not be enough. In its most recent earnings, TreeHouse Foods' net sales decreased 10% last quarter and saw volume decline 8.9% year-over-year.
But TreeHouse isn't the only company struggling. In recent years, many food and beverage companies have cut food manufacturing jobs. Companies such as Dean Foods, Coca Cola, General Mills, PepsiCo and Kellogg's RXBAR have slashed jobs and closed plants in an effort to raise profits.
The private label powerhouse is working on a wider restructuring that doesn't necessarily involve job cuts. At an Investor Day event last year, Oakland announced the company was consolidating to four divisions to enhance relationships and interactions with retailers, Food Business News reported. TreeHouse is merging its Meals and Condiments business units, and reorganizing its company segments around beverages, snacks, baked foods and center store. The snacks division, which consists of nuts and trail mixes, is also under strategic review — reports in November said TreeHouse was considering selling it — which could further reduce the company's divisions.
With continued job cuts and a shrinking portfolio, it seems that TreeHouse's negative streak is going to remain. The company's fourth quarter earnings are expected to be released Feb. 14, so it could be more clear then if TreeHouse's cost-cutting efforts are improving its outlook at all, and whether the internal reorganization might be helping business.