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Nestle laying off 103 Hot Pockets factory workers

In the wake of static sales and increased costs, Nestle is laying off about a sixth of the workers at its plant in Chatsworth.

January 05, 2012|By Tiffany Hsu, Los Angeles Times

Hot Pockets aren't quite as hot as they used to be.

In the wake of static sales and increased costs, food giant Nestle is laying off 103 employees — about a sixth of the workers at its plant in Chatsworth that make the microwaveable snacks.

The company informed the employees in December that they would lose their jobs as of Feb. 1, said Nestle spokeswoman Roz O'Hearn. Also last month, the plant's six-day workweek was cut to four days.

"Consumers are a little more frugal, and competition is continuing to be very heated," O'Hearn said. "It's very unfortunate, but it is necessary to keep the business healthy and continuing."

After the layoffs, there will be 445 employees left at the plant.

There is another facility in Kentucky that makes Hot Pockets, but it's not facing job cuts, O'Hearn said.

The frozen food category in general has stumbled recently because of the economic downturn and price increases in ingredients such as meat, dairy and grain, O'Hearn said.

In October, Nestle disclosed that sales at its frozen foods segment in North America had stayed flat over the first nine months of 2011 compared with the same period a year earlier.

The entire frozen foods category is down 0.8% in units and dollar value for the year that ended March 19, 2011, compared with the year-earlier period, with 13.9 billion items earning $40.2 billion in sales, according to Nielsen Co.

Frozen hors d'oeuvres and snacks suffered a 1.2% drop in revenue to $1.2 billion and a 5.9% plunge in unit volume to 347.4 million, Nielsen said. Nestle bought the Hot Pockets brand from Chef America in 2002 for $2.6 billion, when freezer-aisle snacks were a booming segment.

tiffany.hsu@latimes.com

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