Weakness in the frozen foods category is forcing Nestle's Chatsworth… (Nestle )
Hot Pockets aren’t quite as steamy as they used to be, forcing the Chatsworth factory that produces the frozen Nestle snack to lay off about a sixth of its staff.
Nestle’s Prepared Foods Division informed 103 production workers in December that they would lose their jobs but will continue paying them through February, the company said. At the same time, the facility cut its standard six-day workweek down to four days.
There will then be 445 employees left at the Hot Pockets plant.
There is another facility in Kentucky, which has yet to face job cuts, that also makes the microwavable turnovers, said spokeswoman Roz O’Hearn. The San Fernando Valley Business Journal first reported the layoff news.
The frozen food category has stumbled recently due to the difficult environment, suffering from price increases in ingredients such as meat, dairy and grain, O’Hearn said. Nestle said in October that sales at its frozen foods segment in North America have stayed flat over the first nine months of 2011 compared with the same period a year earlier.
Nestle bought the Hot Pockets brand from Chef America in 2002 for $2.6 billion, back when freezer-aisle snacks were a booming segment. Since then, customers have adjusted their buying behavior, according to the Swiss food behemoth.
“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.”
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