Several factories and distribution centers shut down across the Bay Area this week due to recent cost crunches, eliminating hundreds of jobs in the process.
The first to announce closures this week was an Amy’s Kitchen frozen foods production plant in San Jose on Monday. Due to increased costs, inflation, supply chain issues, and costs associated with being in the Bay Area, the plant, which had only just opened in March of last year, announced a cease of operations. A total of 331 jobs were lost as a result.
“With the inflation that’s going on, we had a huge increase in costs,” said Amy’s Kitchen CEO Fred Scarpulla on Monday. “We had supply chain disruptions, we experienced a lot of staff turnover and labor shortages. A lot of things disrupted production and created startup problems. I am very sad to make the decision to close down the plant.”
In a letter to the Employment Development Department (EDD), Amy’s Kitchen disclosed that the plant was now running at a $1 million a month loss due to the many recent changes, forcing their hand at their decision to close it.
On Thursday, beermaker Anheuser-Busch was the next major company to shed workers, letting go of 142 workers in a deal that sold it’s AB One distribution center in Oakland. While other companies will take over the center, the workers there were not included in the sale. The Brewing company is currently bargaining with the Teamsters union over how the employees there will transition out. While details are still emerging about the sell off, including if factors such as inflation and Bay Area costs had been major factors in the decision, it is another major company now gone from the area.
Along with several smaller closings this week, as well as other high-profile closings in the last month, including Tesla closing their San Mateo Office costing around 200 jobs to be lost, the Bay Area is currently going through a rough time for employment. While job growth was slightly up this year through June according to the latest statistics, massive numbers of layoffs and losses have been recorded, especially in the tech sector. A mixture of job losses and a growing number of remote work positions post-Pandemic have left many office buildings in San Francisco and other cities vacant, with the latest numbers showing office buildings only having a 38.1% occupancy.
Major closures, layoffs continue in Bay Area
The mixture of blue and white collar job losses has left many worried, but with experts noting that this is only continuing the current Bay Area trend.
“San Francisco still, post-COVID, has high costs in everything from transportation to housing,” explained Julie Ochs, a San Jose-based headhunter and hiring specialist, to the Globe on Thursday. “Tech jobs are leaving, especially with remote work, and many factory and manufacturing jobs are being hit pretty hard. You know, we like to point to the Tesla factory in Fremont here, but they are not the only employer. There are lots of factories and plants, and high costs are affecting them. With inflation going up now and supply lines being strained, especially here with the truckers now blocking the port in Oakland, companies are having to make difficult decisions.”
“And look at that. Within only a few days we’ve been bleeding jobs in these hard-hit sectors. Workers can’t afford to live here and companies can’t afford to stay in business here. And for once, California isn’t to blame, at least not entirely. It’s inflation. It’s housing costs refusing to go down. It’s the price of gas and milk hitting levels we haven’t seen before. And honestly, as the year continues, we’re only going to see more of it around the Bay.”
More major factory and plant closures are likely to be announced in the coming weeks as inflation levels continue to stay high.
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