Lamb Weston Holdings Inc., the French fry giant with 3,000 employees in Central Columbia, will close its potato processing plant in Connell and lay off all 375 employees.
It will also limit production across North America, according to an earnings statement that showed quarterly net profit fell 46%.
Lamb Weston, based in Eagle, Idaho, announced the layoffs in a warning to the Washington Employment Security Department and in a statement blaming an “imbalance between supply and demand.”
The Connell plant is located at 811 W. Gum St., about 56 miles north of Pasco. According to state estimates, Connell’s population was 4,970 in 2023.
Lamb Weston said the restructuring will deliver $55 million in pre-tax cost savings in the current fiscal year. It also said it would reduce capital expenditures by $100 million.
The company stopped producing frozen French fries in Connell on September 30 and has begun closing the factory. The warning indicated that the job cuts will take effect on November 30 and that the closure will be permanent.
“We take job cuts very seriously and understand the impact these decisions have on employees and the communities in which they live,” the company said in a statement.
Affected employees are encouraged to apply for positions in other locations. It will announce job fairs in Kennewick and other communities in the coming weeks.
The cuts represent 4% of Lamb Weston’s global workforce of 10,700 people.
Lamb Weston became an independent, publicly traded company when it separated from ConAgra Foods in 2017.
It is one of the largest producers of French fries in the world and a major buyer of potatoes from Central Columbia. McDonald’s is a leading customer.
It is one of the largest private employers in the Tri-Cities, with processing plants, a research center and corporate offices in Kennewick.
The share price has been reduced
The move to withdraw from Connell comes after the company was hit by a series of setbacks.
On June 13, an Ohio pension benefit organization filed a class action lawsuit against Lamb Weston and two senior executives, alleging they violated federal securities laws in connection with the implementation of a new software system.
The Cleveland Bakers and Teamsters Pension Fund alleged that the company’s stock price was artificially inflated when the company misrepresented the problems it was having with its new software system.
The lawsuit is pending in the U.S. District Court of Idaho and seeks to represent the pension fund and all investors who purchased shares of the company’s common stock between July 2023 and April 2024. Share prices fell by 30% in the wake of the news.
Shares fell another 28% in July as Lamb Weston reported disappointing earnings for the 2024 fiscal year ended June 30.
The sell-off gave Lamb Weston the dubious distinction of being Wall Street’s biggest loser of the day in a season beset by disappointing financial reports.
On October 1, the stock was trading at $64.91, down from a 52-week high of $111.88. (NYSE: LW)
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