Dive Brief:

• Tyson Foods announced Monday it will close its poultry processing, broiler and hatching operations in Glen Allen, Virginia and in Van Buren, Arkansas, which will result in the loss of roughly 1,700 workers. In an email, the company’s spokesperson Derek Burleson said the goal of the closures is to “strengthen our poultry business by optimizing operations and utilizing the full available capacity at each plant.”
• Tyson said it is working to ensure employees have the option to apply for roles at other facilities. The company said it is working with local officials to assist workers who wish to stay in Glen Allen and Van Buren, and will provide relocation assistance where applicable.
• Amid a period of fluctuating demand levels for its products, Tyson has made strategic decisions over the past year with the goal of streamlining its supply chain to boost efficiency.

Dive Insight:

Tyson’s decision to shutter two of its facilities, which the company said falls in line with its strategy to boost its poultry capacity, came as a surprise to the employees impacted.

In a statement to The Wall Street Journal, the poultry giant said its “current scale and inability to economically improve operations” led to the decision. 

The United Food and Commercial Workers Local 400 — which represents the nearly 700 Virginia employees Tyson announced it intends to lay off — said in a statement that the company provided the union with no forewarning about the closure.

“These men and women risked their lives and the safety of their families to keep this plant operational during the pandemic, and this is the thanks they get?” the union’s local president Mark Federici said.

In 2021, Tyson announced its intention to construct a new $300 million plant in Danville, Virginia — in the same county as Glen Allen — to produce fully cooked chicken products like Any’tizer chicken bites and chicken nuggets. The facility is still under construction and is set to open in August, local news outlet WDBJ reported last month.

Federici said Tyson has received “untold sums of taxpayer dollars” to construct the Danville plant. When asked if the company has a response to the union’s charge, Burleson told Food Dive taking care of affected employees is Tyson’s top priority, and that it hopes they will find new positions in the company.

The plant closures follow recent economic volatility for Tyson, which previously saw a massive increase in profits following the increase in meat demand during the pandemic.

In its most recent quarterly earnings call last month, the company missed earnings expectations, in part because of weaker demand for its fresh chicken products. CEO Donnie King said it got “hit in the mouth” in the quarter because of all the protein available on the market.

Last year, high demand for its meat products resulted in supply issues that Tyson said it aimed to ameliorate by implementing aggressive strategies, including more automation at its facilities and worker retention programs.