Investing.com -- One day after reaching a deal with officials in Texas and Oklahoma on an agreement that will require it to disclose each time it detects a positive test for listeria, Blue Bell Creamery announced the elimination of 1,450 jobs on Friday.
In late-March, Blue Bell recalled 10 frozen snack items after the U.S. Food and Drug Administration (FDA) discovered the presence of Listeria bacteria in the company's Chocolate Chip Country Cookies, Great Divide Bars and individually packaged Scoops. At the time, the company also recalled several other items due to the potential of Listeria monocytogene presence, a bacteria which can cause serious sometimes fatal infections in young children and elderly people with weakened immune systems.
The job cuts will affect 750 full-time and 700-part-time workers at the iconic Central Texas creamery. Another 1,400 employees will be furloughed in the cost-cutting measure. More than 35% of Blue Bell's workforce of 3,900 will lose their positions. While Blue Bell is available for sale in less than half the Continental portions of the U.S., mostly in Southern states, it still ranks as the third-highest selling brand in the nation.
“The agonizing decision to lay off hundreds of our great workers and reduce hours and pay for others was the most difficult one I have had to make in my time as Blue Bell’s CEO and President,” Blue Bell Chief Executive Paul Kruse said in a statement.
After the initial discovery, Blue Bell officials said it would work closely with the FDA and the Centers for Disease Control and Prevention to contain the listeria outbreak. In early-April, the company voluntarily suspended operations at its manufacturing plant in Broken Arrow, Okla. after a 3 oz. chocolate cup tested positive for Listeria monocytogenes. Two weeks later, the company took all of its frozen products off the market nationwide. Subsequently, the CDC linked the presence of listeria to three deaths and a number of other illnesses.
State health officials said investigators must supervise a complete assessment of Blue Bell's progress in removing listeria from its equipment "at least two weeks," before the company's products return to the market. The State of Alabama is close to completing a similar agreement with Blue Bell, company officials told USA Today.
Earlier this week, reports surfaced of Blue Bell products appearing on the black market at significantly marked-up prices. One seller on Craig's List offered a Blue Bell fudge bar to bidders for $100, while another peddler put a half-gallon of Vanilla Bean ice cream on sale for a sum of $1,500.
Meanwhile, Kruse said the process of cleaning its four production plants has been taking longer than expected, necessitating the lay-offs.
"We did everything we could to keep people on our payrolls as long as possible," Kruse said. "There is no firm timeline for when Blue Bell will continue producing ice cream again. When production resumes, it will be limited and phased in over time."