More than 300 Amy’s Kitchen staffers laid off in reorganization plan

Amy’s Kitchen will lay off 311 workers, nearly 15% of its workforce, under a reorganization plan announced to the employees over the past two days.

The laid-off staffers include managers, clerical staff and assembly line workers in the Petaluma and Santa Rosa facilities, as well as those working remotely from anywhere.

Employee departures will be staggered, company officials said over a phone call.

Neither the Pocatello, Idaho and Medford, Oregon plants, nor the company’s three drive-thru restaurants in Rohnert Park, Corte Madera and San Francisco International Airport will be impacted, according to company officials, who declined to provide the salary range of the positions to be cut or a breakdown of numbers at each facility.

The family-owned Petaluma-based natural foods firm was founded by Andy and Rachel Berliner in 1987.

“We have a loyal and incredible workforce. That’s what makes this so hard, and it should be hard. We don’t make these decisions lightly,” Amy’s President Paul Schiefer told the Business Journal in an exclusive interview.

Schiefer stressed the reorganization is critical to the viability of the company moving forward in the $67.6 billion U.S. natural food movement.

“This is absolutely the outcome that, if we could have avoided, we would have. It’s heartbreaking and sad,” he added.

Schiefer said plant operations that include packaging have been working at 65% capacity, but he identified the optimum level of approximately 85-90% capacity.

“What we’re selling has changed since COVID. We’re making a different mix and different products,” Schiefer said.

For example, people were eating at home more and consumer behaviors changed. Sales of frozen side dishes and canned soups have yet to rebound, but entrées “are doing well,” Schiefer explained.

As a privately held firm, the company has declined to release sales numbers. As the pandemic cranked up in late 2020, Food Business News reported the company managed $600 million in annual sales. A few years later, business analytics firm Dun and Bradstreet listed Amy’s Kitchen’s annual revenue at $466.41 million.

“In general, people are cooking more pasta, rice and beans (at home). (And) the middle class is more impacted,” Schiefer said. “With changing habits, there have been some big shifts.”

Beyond affecting what is prepared and sold in households across the U.S., pricing has changed in the approximately 56,000 grocery stores in which Amy’s Kitchen sells its product line, which typically costs more than comparable frozen meals, and ranges from packaged meals and pizzas to burritos and wraps that span the globe in culinary influences.

Outgoing Amy’s Kitchen employees are due to receive a severance package and the choice to transfer to other locations or positions to be determined.

“These layoffs are incredibly difficult,” Amy’s People Officer Goretti Hamlin said. “We are committed to doing everything possible to support our people during this transition.”

Petaluma City Manager Peggy Flynn offered her local government’s support to the company in any way to perhaps help create a list of other food-based companies in the region where the laid-off employees may work.

“This is sad for Amy’s, but sometimes you gotta do this,” Flynn said. “Our hearts go out to the folks being laid off because it’s such a people business. The city will be there for Amy’s. But Amy’s is a very resilient company. They’ve grown and restructured based on a diversified market.”

An array of economic issues prompted the closure of the company’s San Jose production center in September 2022.

Flynn said the city was “thrilled” when Amy’s moved downtown, relocating from Corporate Circle to its 20,000-square-foot headquarters at Kentucky Street and Western Avenue. The Santa Rosa facility is on Northpointe Parkway.

Its headquarters in Petaluma is one-third the size of its former location.

Flynn, along with Petaluma’s Economic Development Director Ingrid Alverde, have noticed other examples of manufacturing companies feeling the pinch since the pandemic.

Besides other economic forces that have business leaders awaiting a promising upturn, labor force costs have also gone up, along with the price of goods. And “Petaluma is not immune,” Flynn and Alverde reiterated.

“The pandemic affected companies differently. There had to be a slowdown for some, and the pandemic raised the ante,” Alverde said.

Susan Wood covers agriculture, law, cannabis, production, transportation as well as banking and finance. She can be reached at 530-545-8662 or susan.wood@busjrnl.com