Green Mountain Coffee Roasters (GMCR) recently announced a workforce reduction affecting a total of 74 full-time production and production support employees in its Castroville, Calif. and Toronto, Ontario, Canada facilities. In addition, seasonal layoffs impact a total of 36 positions in its Toronto and Montreal, Quebec facilities. Combined, these actions affect less than 2 percent of GMCR's total North American employees as of the end of its first quarter fiscal 2013, Dec. 29, 2012.
"As we continue to grow, we also are working to enhance manufacturing and logistics efficiency across our nine North American K-Cup® pack and Vue® pack production locations. As part of these efforts, we are reducing the size of our regular workforce in two of our smaller production facilities, Castroville, California andToronto, Ontario, while also implementing some seasonal layoffs in our Montreal, Quebec and Toronto facilities," said Brian Kelley, president and CEO of GMCR, in a prepared statement. "These changes align the size of our workforce with production demand at these particular locations."
All reductions are anticipated to be complete by May 11, 2013. GMCR expects a one-time pre-tax charge related to these actions during its second quarter fiscal 2013 in the range of $600,000 to $650,000. The company expects the impact of the charge will be immaterial to its second quarter fiscal 2013 results and did not update its previously issued second quarter or fiscal year 2013 guidance as a result of these actions.
"We recognize the impact these actions have on our employees and their families and intend to support them through the transition process," continued Kelley. "We appreciate and value the importance of reliable employment at all of our locations. While we have consistently supplemented our regular production work force with seasonal employees, as we continue to grow and create more jobs, we expect the ratio of flexible production and support employees to regular work force will increase as we work to drive efficiency during peak periods across our North American manufacturing base."
In general, affected employees would be considered for qualified regular or flexible positions that may be available in the future. For those employees whose positions are eliminated, GMCR is offering outplacement services and severance based upon years of service in order to support the transition.