Hostess announces layoffs nearly a year after J. M. Smucker deal
Hostess Brands, the maker of Twinkies and CupCakes, is laying off 79 employees at its Lenexa, Kansas headquarters, according to a WARN notice dated July 29.
A spokesperson for Hostess Brands owner J. M. Smucker Co. confirmed the layoffs to Modern Retail, saying they were related to J. M. Smucker’s acquisition of Hostess Brands in September 2023. “Following a thorough review of our operating model and business needs as we coordinate the integration of Hostess Brands, we have made updates to our organizational structure,” the spokesperson said via email. “With these decisions, some employees currently supporting the business will be exiting the Company.”
News of the cuts comes 11 months after J. M. Smucker acquired Hostess Brands for approximately $5.6 billion. With this move, J. M. Smucker — the maker of Jif peanut butter and Uncrustables — widened its reach in the snack category. J. M. Smucker said it would absorb approximately 3,000 people from Hostess Brands as a result of the deal.
In a June 2024 earnings call, Tucker Marshall, J. M. Smucker’s chief financial officer, said the company expected Hostess Brands to contribute 9%, or $1.4 billion, to J. M. Smucker’s fiscal 2025 top-line outlook. “We see that in our first couple of quarters, we’ll be sort of around flattish to slightly up,” he said. “As we think about the portfolio, we’re still very pleased with the acquisition, not only strategically, but the way that it’s contributing to some of the near-term objectives that we have.”
For its most recent fiscal year ending in April 2024, J. M. Smucker reported net sales of $8.2 billion, down 4% year over year. J. M. Smucker’s net sales for the fourth quarter were $2.2 billion, down 1% from a year earlier. In a statement, CEO Mark Smucker said the next year would be “a year of investment in our brands, capabilities and talented employees.”
“Our strategy is working and our priorities are clear: deliver our core business, successfully integrate the Hostess business, achieve our synergy aspirations and advance our transformation and cost discipline activities,” he continued.
The layoffs aren’t the first hurdle for Hostess Brands. Twelve years ago, the company filed for bankruptcy protection after having disagreements with union leadership over wages and benefits. The union accused Hostess Brands of making unreasonable demands, including cutting wages and benefits for workers by 30%, while top executives received pay raises.
Workers at 24 Hostess Brands facilities went on strike, and in November 2012, Hostess announced it was winding down operations, saying the strike “crippled the company’s ability to produce and deliver products at multiple facilities.” As a result, 18,500 workers were laid off, per the Los Angeles Times.
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Hostess Brands CEO Gregory F. Rayburn said in a statement at the time.
In March 2013, Hostess Brands sold its key assets to Apollo Global Management and Metropoulos & Co. The two paid $410 million to purchase certain Hostess brands including Twinkies, Ho Hos, Ding Dongs and Donettes; five of Hostess’s bakeries; and some of its equipment. A different company, Flowers Foods, Inc., agreed to pay $360 million for the majority of Hostess’s bread business.
The J. M. Smucker spokesperson said laid-off employees will be “fully supported as they transition,” per the company’s outplacement processes. “Please know that any decision that impacts our employees is made only after careful consideration,” they said. “We will manage this transition in a thoughtful manner and in alignment with our commitment to being respectful of the unique needs of every employee.”