Springdale-based Tyson Foods Inc. confirmed Tuesday its closing an Arkansas poultry plant that employs more than 950 and a second plant in Virginia in the summer in a move to optimize its operations.
The company said the current scale and inability to economically improve operations led to the decision to close the facilities.
The meat giant said it would offer displaced workers jobs at its other plants as it shifts its production to better utilize its processing capacity. The Van Buren operation employs 969 workers and the Glen Allen, Va. plant has 692 workers, leaving more than 1,650 without jobs, with both plants slated to close May 12.
Tyson shares barely moved in trading Tuesday, closing at $57.30, up 9 cents or less than 1% in trading on the New York Stock Exchange. Shares have traded as low as $56.65 and as high as $99.54 over the past year.
Tyson Foods has 142,000 workers worldwide according to its most recent annual report. In 2022, the company saw $53 billion in sales with 32% of those sales attributed to its chicken segment. The company's earnings report of its first quarter sales and profits released in February widely missed analysts estimates with the company saying all its meat segments lagged because of inflation and economic pressure on its customers.
"We hope that our team members will find a new position within the company; Tyson Foods will facilitate this process by allowing every team member at the facility to apply for open, posted roles," Derek Burleson, a Tyson Foods spokesman said in a statement in response to emailed questions. "We will also assist by offering relocation benefits where applicable."
He said the company will work with state and local agencies including the Arkansas Division of Workforce Services to help employees who choose not to relocate find resources and assistance.
Julie Murray, president and chief executive officer of the Van Buren Chamber of Commerce, said while the news of the plant closure came as a surprise, Tyson Foods is working closely with the chamber to help the displaced workers find new jobs. She said a job fair is slated for April and she's coordinating with employers not just in Van Buren but regionally including nearby Fort Smith, to connect them with workers. She said there's also an effort to connect workers with educational services if they need to be retrained or are seeking new skills.
"We've hit the ground running," she said.
Murray said that while this was the first major plant closure in years, the timing at least coincided with a period when workers are in demand in the area.
"We don't have an employer who isn't looking to hire now," she said.
In a Tuesday interview, Alan Ellstrand, professor of management and associate dean of programs and research at the Walton College of Business at the University of Arkansas, said plant closures are always difficult decisions but often result when operational inefficiencies force a company's hand. He added technological advancements often figure into the mix, as it's often easier to do more with fewer employees when plants automate and sometimes as a result older plants become less viable.
"I'm sure it's a tough decision to close a plant in their own backyard," Ellstrand said.
Tyson's Van Buren plant located at 802 S. 28th St. was acquired by Tyson in 1986 and processes chicken parts. The Glen Allen, Va., location includes a processing, broiler and hatching operation, according to Tyson Foods.
In recent earnings calls, Tyson Foods has pushed its shift toward automation, saying the move makes plants more efficient but also improves working conditions for its employees. In December 2021, the company said it would invest $1.3 billion through 2024 in automation in a move to both increase production and reduce labor costs.
In late January Tyson Foods named a new group president of its poultry division. Wes Morris, who began working for Tyson in 1999, held several posts including heading up the company's prepared foods operations before his retirement in 2017. Morris returned and replaced David Bray, who had led the division since 2021 and has left the company.
During the first part of the year Tyson Foods has named a new general counsel; seen its executive vice president, chief technology and automation officer exit the company; and named a new group president for its fresh meats segment. In late September, Tyson Foods saw Stewart Glendinning move from chief financial officer to the group president of prepared foods and John R. Tyson -- son of Tyson chairman John H. Tyson -- move into the CFO post.
In October, Tyson Foods said it was recalling about 1,000 executives working in its Chicago area and Dakota Dunes, S.D., offices to move to a centralized company headquarters in Springdale. At the time, Tyson said the move would begin in phases starting early next year and take about a year to complete but many have chosen not to move to Arkansas, according to media reports.
Late last month Tyson Foods said it has a deal in place to acquire Williams Sausage Company Inc., in Tennessee. The company employs about 500 and produces fresh and fully cooked sausage, bacon and sandwiches for retail and food service companies.