- Tyson Foods is closing a plant in August that makes taco filling and pizza toppings in Columbia, South Carolina. A Tyson spokesperson told Food Dive in an email that about 150 team members work at the plant, and the pandemic did not influence this decision.
- The company said in a statement it plans to work with state officials to ensure the employees impacted by the closure know about unemployment benefits and any potential opportunities at Tyson.
- Tyson said the closure is part of ongoing efforts to increase efficiency in its business and they made this "very difficult decision in order to continue focusing on and investing in strategic growth priorities."
While Tyson says its latest cost-cutting move was not influenced by the pandemic, it is coming during tough economic times. Similar to the rest of the country, South Carolina's unemployment rate is high because of the pandemic, with unemployment initial claims jumping to 582,265 in the state over the last 12 weeks, according to employment department data reported by The State.
Tyson has been restructuring recently so this closure fits into that strategy. Earlier this year, the company said it was cutting about 500 jobs, with most of the layoffs coming at corporate offices in Chicago and Arkansas. The company also recently sold its Golden Island Jerky Co. business and closed the company's Rancho Cucamonga, California plant which hosted 371 jobs.
Companies regularly evaluate plants as they look for ways to curtail expenses and make room for more trendy investments. Last year, Tyson launched its plant-based brand Raised & Rooted and has made several investments through its venture arm in mushroom-based protein producer MycoTechnology, plant-based shrimp manufacturer New Wave Foods and cell-based meat producers Memphis Meats and Future Meat Technologies.
Tyson's plant closure also comes as the company faces various challenges with its operations because of the coronavirus. Tens of thousands have tested positive for coronavirus across the food industry and at least 99 meatpacking workers have died as a result. There have been at least three lawsuits filed against Tyson by families of meat plant workers who reportedly died from the coronavirus. More than 30 meatpacking plants, including operations run by Tyson, have closed temporarily or indefinitely in the last several months as workers test positive.
The company reported its Q2 net income dropped 15% from a year ago as disruptions hurt its results. "The direct impacts of the virus have created operational challenges, including absenteeism, reduced production speeds and selected idling of plants," Tyson CEO Noel White said on its most recent earnings call. Those temporary plant closings dramatically increased operating costs for the company so it could be looking for more cost-cutting efficiencies in the future as a result.
As the company struggles to keep plants open with healthy workers and make cuts where it needs to, Tyson is also facing antitrust accusations. Tyson recently announced it is cooperating with the Department of Justice's price-fixing investigation into the chicken industry. At the same time, Democratic senators are opening an investigation of Tyson Foods, JBS USA, Cargill and Smithfield Foods after reports that the companies were exporting a high amount of pork to China, while warning of U.S. meat shortages and raising prices.
With the issues mounting at Tyson, this latest closure is likely only the start of changes the meat giant could experience in the coming months.