Hostess Brand Inc. announced its intention to shut down company operations and stopped all production. It said it would lay off its 18,500 employees because the union workers failed to report to work by a deadline Thursday. But Hostess notified the North Carolina Department of Commerce back in May it would lay off over 600 employees in North Carolina in January in 35 counties. The largest massive layoff is coming to the facility in Nash County with 286 employees losing their jobs. Hostess was required to notify the state under the federal Worker Adjustment and Retraining Act or WARN.
Under the law companies are required to file a WARN notice at least two months before massive layoffs. That is supposed to give states time to step in and help those who are going to lose their jobs. Hostess told the state they would be permanent closures. Now with the announcement Hostess Brands will liquidate its assets those jobs won’t be coming back unless an investor picks up the pieces and gets the Twinkies and Ding Dongs back on the production line. Hostess was in the process of trying to come out of a bankruptcy filed last January. It had reached an agreement with one union but another one went on strike and workers refused to return to work this week.
The latest move by Hostess is technically in violation of the WARN Act but the U.S. Department of Labor has no authority to punish the company. The law does, however, allow the fired employees to file legal actions.
According to Commerce Department documents the Division of Employment Security will have a lot of work on its hands from impending massive layoffs. Since January the state has been notified over 6,300 people will lose their jobs this year. Just this month the Commerce Department was warned Kmart would lay off nearly 80 people at a Durham store. Mills Manufacturing filed a notice almost 70 employees would lose their jobs at the end of December. Those are added to the hundreds of other layoffs planned by the end of the year. That includes three defense contractors in Cumberland County. The companies insist the layoffs are not in anticipation of defense sequester cuts coming in January. County Manager James Martin says he hopes other contractors will hire the workers.
The commerce numbers don’t include the 950 losing their jobs at the Wake Forest Medical Center in the face of health care reform coming in January with Obamacare. N.C. State University economics professor Mike Walden was quoted by Bloomberg Businessweek as calling the center’s plans a “bellwether announcement likely to be repeated across the state and nation.”