Dairy Processor Closes Richmond, Virginia Plant and Cuts Jobs
A day after posting dismal earnings results, Dean Foods Co (NYSE:DF) announced a plant closure and subsequent layoffs in Richmond, Virginia.
Dallas-based Dean Foods, known for being the largest dairy company in America, is closing its milk processing plant in Richmond. The company has confirmed that its “PET Dairy” facility will be wrapping up its operations in the coming months. This will result in 75 workers being let go.
The announcement comes a day after Dean Foods reported its second-quarter 2017 results. The dairy company disappointed Wall Street’s expectations for both revenue and earnings. In the earnings call, the company announced an aggressive multi-million-dollar cost-cutting plan for the year, hinting that plant closures and layoffs were to follow.
During the conference call, the CEO of Dean Foods, Ralph Scozzafava, said, “Our financial results came in well below our expectations. We are not satisfied with our performance and are determined to improve our execution. We are accelerating and expanding an aggressive set of commercial and cost productivity initiatives to address volume and mix.”
As part of its cost productivity plan, Dean Foods will be targeting an annual cost reduction of between $40.0 million and $50.0 million within its general and administrative functions (G&A). This is the part of the income statement that covers employee salaries and benefits.
The company says that the cost reduction targets are expected to be met by the end of this year. As indicated in its latest earnings release, Dean Foods has already been pursuing cost productivity through efficiency in its operations, consolidating its business through plant closures and trimming its workforce.
Dean Foods is a publicly traded company that produces fresh milk and dairy products. It boasts a portfolio of more than 50 national and local dairy brands. Dean Foods currently employs a workforce of almost 17,000 employees across the United States.
“Richmond PET Dairy plant closing; 75 employees to lose jobs,” ABC8 News, August 10, 2017.
“Dean Foods Announces Second Quarter 2017 Results,” Dean Foods Co, August 8, 2017.