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Hostess Starts Firing 15,000 Workers
By
Jen Chung
Published Nov 23, 2012
Modified Nov 23, 2012
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By
Jen Chung
Published Nov 23, 2012
Modified Nov 23, 2012
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After management and unions met for mediation and could agree on nothing, a federal bankruptcy judge gave Hostess permission to liquidate its assets—which also meant firing 15,000 workers—on Wednesday. The financially troubled company, which had filed for bankruptcy earlier this year and blamed the move on agreements with unions, said it would retain 3,200 positions for the wind-down, "Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process is expected to be completed in one year."
A press release also said, "Among other provisions, the Court order allows Hostess Brands to return excess ingredients and packaging; provides liquidity through an amended debtor-in-possession financing agreement and consensual use of cash collateral; and authorizes the Company to implement a non-executive employee retention plan to ensure the Company has the necessary personnel to implement the wind down."
The Teamsters, who represent nearly 7,000 employees, said it would help its members "receive what they are owed in the form of wages for hours worked accrued benefits. We will also make sure our members understand their options and assist them in filing for unemployment benefits and connecting them with local labor councils and agencies that offer other out-of-work assistance. This is truly a sad day for thousands of families affected by the closing of this company."
Hostess CEO Greg Rayburn said firing the employees immediately means that they can collect unemployment. He added, "There's an extreme amount of interest from many buyers" for various Hostess brands, like Twinkies. A financial adviser described the interest as “very intense” since it's a “once in a lifetime opportunity for our competitors to get iconic brands."
Tagged
bankruptcy
hostess
ring dings
strike
twinkies
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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