SAN FRANCISCO (KCBS RADIO) – Petaluma-based vegetarian frozen food company "Amy's Kitchen" is closing its San Jose production factory later this year, officials said Monday.
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The San Jose Mercury News reported that the plant will shut down in September and wipe out an estimated 300 jobs.
In a statement emailed to KCBS Radio, Amy's Kitchen cited economic challenges which include "widespread supply chain disruptions, fluctuating consumer demand, and persistent inflation" as reasons for the sudden closure.
The company opened the San Jose facility, located 1885 Las Plumas Ave., in March, 2021 as a way to combat rising demand for its pizza product which was outweighing its capacity to make the food at its existing plants. However, a tight-labor market and skyrocketing inflation created missed distribution opportunities, and supply-chain issues increased some raw materials and logistics costs by more than 100%, according to a company spokesperson.
Officials estimated the facility is now losing $1 million per month.
"Our employees have remained top of mind during this realignment," the company added in a statement. "In addition to continuing employees’ salaries and benefits during this transition, we have committed to provide all impacted employees with career placement assistance. We will continue to live our promise of doing what is best for our customers, our farmers, our employees, and our planet."
The decision adds yet another blow to an embattled year for the company. Factory line workers at its Santa Rosa facility in January filed a complaint with the California Division of Occupational Safety and Health alleging "unrelenting managers, poor working conditions and demanding production mandates," according to SFGATE. The lawsuit prompted some grocery stores nationwide to boycott the company's products.
In addition, later that month, the U.S. Food and Drug Administration recalled the company's popular plant-based macaroni and cheese due to the presence of unlisted milk in the meal's contents.
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