SAN JOSE – Amy’s Kitchen announced that its large frozen food plant in San Jose is closing its doors later this year, a move that stunned employees who showed up for work on Monday.
The company cited ongoing supply chain issues and higher prices for ingredients as the reason for shutting down the plant, which makes frozen organic pizzas, on Las Plumas Avenue.
Apparently, that final decision was made very quickly, because employees said they were blindsided Monday by the bad news.
“Si, todos estamos, in shock,” said worker Alma Martinez came into work today and then was told to go home because she no longer has a job.
Martinez said she came to work on Sunday, and no one said anything about the shutdown. She’s one of about 300 workers who will lose their jobs, which pay about $17.50 an hour.
“Of course, it’s sad. We really loved the company. They took care of us, they gave us everything to make us happy, so it’s sad,” said Leticia Castro, who was also laid off.
Amy’s Kitchen said the plant was losing $1 million a month because demand for its frozen pizzas is down, while at the same time prices for raw ingredients are up.
Two of the main things that go into a pizza—flour and cheese—are up about 40 and 50%.
“We’re all getting killed a little bit by commodity prices right now,” said Chuck Hammers, president of Pizza My Heart, which has no connection to Amy’s Kitchen.
The local chain does have 36 years in business and 25 restaurants.
Hammers said the hit to the bottom line—especially when you add in higher employee costs—is significant.
“It’s dramatically cut margins the first half of this year. We just did a small price increase, 25 cents on slices, just because we had to,” Hammers said.
Hammers said says it’s probably even harder on the frozen food side.
“When you’re in the supermarket, you don’t really have the ability to raise prices much. They’re fighting a real tight margin,” Hammers said.
Amy’s Kitchen said it’s trying to help it’s laid off workers with two months of severance, and providing all impacted employees with career placement assistance.
The company also said its facilities in Santa Rosa, Oregon and Idaho are unaffected and running at full capacity.