Blue Bell Ice Cream Company has faced a major loss due to the total product recall it had to make after a series of listeria related illness were associated with its products. The company has decided to reduce its workforce by 37% due to the potential decrease in sales that the company may face due to bad publicity.
The company’s CEO released a statement saying that they have to take hard measures in order to significantly reduce costs of running its operation due to the lengthy restrictions posed on its production by the authorities due to the sub quality products.
The analysts believe that the repairs and upgrades are going to take far longer than the company anticipated, which has led to the increased replacement costs. This delay in the production and expected slump in the future sales are the main factors that have forced the company to take harsh actions.
The company would be cutting about 1400 employees across different states where it operates. The company is also seeking to reduce the employment costs by reducing the salaries. This decision would cause about 700 to 750 part time worked to be laid off as well.
The company is also facing a lengthy requirements given by the authorities, which the company has to fulfil in order to resume its production. The bad publicity and huge costs of upgrades are going to make this a very hard year for the company.