Hostess Bankruptcy Plans Summer Layoffs
The Hostess brand snack cake maker filed for Chapter 11 bankruptcy earlier this year and has since been working towards debt reorganization. Earlier plans for managing their near $945 million debts were driven away from employees in efforts to disrupt operations. However, issues surrounding pension and union obligations have surfaced and are now jeopardizing the jobs of hundreds of employees.
Catching The Heat
This isn’t the first time Hostess Brands Inc. has filed for bankruptcy. In fact, this is their second filing in 10 years. The Texas based snack company has successfully exited Chapter 11 in the past, but their current plans for bankruptcy have some accusing the company of abusing the system. As the blame shifts towards unions and employee pension obligations, Hostess is putting pressure on employees to voluntarily accept cuts or risk losing their jobs.
Not only are employee benefit reductions among the top choice for debt restructuring, but job outsourcing and a round of layoffs is expected to be implemented this summer. The company has announced that 253 employees in the Texas facility will be laid off by July 4th. Another 187 employees in Connecticut may also find themselves without a job over the next few weeks. The remaining 18,000 nationwide Hostess employees have already received notification regarding the possibility for more layoffs as the company moves forwards in their debt restructuring plans.