It’s going to be a chilly holiday for ice cream workers in California. Nestlé USA, Inc. filed a notice with the state of California recently, saying it will be “temporarily” laying off 217 employees at its Tulare County Häagen-Dazs ice cream plant.
In September, Nestlé announced that its ice cream facility on District Boulevard in Bakersfield was temporarily laying off almost 600 employees starting in November due to production cuts. Together, the two temporary layoff announcements will affect 815 workers.
According to the WARN filing, the recent layoffs are scheduled to start on November 26 and last until January 20 for workers in Kern County (Bakersfield). In Tulare, workers will be forced to stay at home from December 9 to January 14.
Nestlé said the layoffs are a result of production slowdowns. Officials at Nestlé did not provide any additional information.
Nestlé’s ice cream division is made up of a number of brands. In addition to Häagen-Dazs, the company owns Dreyer’s, Mövenpick, Edy’s, and Skinny Cow. In October, the company announced that third-quarter revenue decreased 0.4% year-over-year to CHF 65.3 billion (US$65.9 billion). Milk product and ice cream sales came in at CHF 9.89 billion (US$9.98 billion).
The weak sales are expected to continue with total sales growth of 2.6% in 2017 versus 3.2% growth in 2016. The company said it will take a restricting charge of $410.0 million to $512.0 million as it looks to ramp up its long-term cost-cutting initiatives.
Investors are hoping Nestlé can make significant changes and tap into consumers’ ever-changing habits. On a local level, ice cream production in California has, for the most part, been falling since 2011, from 142-million gallons produced in 2011 to 118-million gallons in 2016.
It’s a similar pattern seen across the U.S., with ice cream production essentially flat. In 2011, 657-million gallons of ice cream were produced; fast forward to 2016, and that number had inched up to 668-million gallons.
While summer tends to be the best time to make ice cream (though production fell 10% in 2017) the same cannot be said for the winter months, even in California.
“WARN Report,” State of California Employment Development Department, last accessed October 25, 2017.
“Nestlé reports nine-month sales for 2017,” Nestlé, October 19, 2017.
“Ice cream production in California and other U.S. states from 2011 to 2016 (in gallons),” Statistica.com, last accessed October 25, 2017.
“Bakersfield Nestlé ice cream facility laying off nearly 600 over winter months,” The Bakersfield, Californian, September 28, 2017.