KENNEWICK — Lamb Weston Holdings Inc., the french-fry giant with 3,000 employees in the Mid-Columbia, will close its potato processing plant in Connell and lay off all 375 workers.
It also will curtail production throughout North America, it said in an earnings statement that revealed quarterly net income declined 46%.
Lamb Weston, based in Eagle, Idaho, disclosed the layoffs in a warning notice to the Washington Employment Security Department and in a statement that blamed a “supply and demand imbalance” for the move.
The Connell plant is at 811 W. Gum St., about 35 miles north of Pasco. Connell had a population of 4,970 in 2023, according to state estimates.
Lamb Weston said restructuring will generate $55 million in pre-tax cost savings in its current fiscal year. It also said it was reducing capital expenditures by $100 million.
It stopped producing frozen french-fries in Connell on Sept. 30 and has started work to shut down the plant. The warning notice indicated the job cuts will take effect on Nov. 30 and that the closure is permanent.
“We take very seriously any job elimination and understand the impact these decisions have on employees and the communities in which they live,” the company said in a statement.
Affected employees are encouraged to apply for positions at other locations. It will announce job fairs in Kennewick and other communities in coming weeks.
The cuts represent 4% of Lamb Weston’s global workforce of 10,700 people.
Lamb Weston became an independent, publicly traded company when it spun out from ConAgra Foods in 2017.
It is among the world’s largest french-fry makers and is a significant buyer of Mid-Columbia potatoes. McDonald’s is a leading customer.
It is one of the largest private employers in the Tri-Cities, with processing plants, a research center and corporate offices in Kennewick.
Share price slashed
The move to pull out of Connell comes as the company was hit by a series of setbacks.
On June 13, an Ohio pension filed a class action lawsuit against Lamb Weston and two senior executives, alleging they violated federal securities law in connection with the implementation of a new software system.
The Cleveland Bakers and Teamsters Pension Fund alleged the company’s stock price was artificially inflated when the company misrepresented problems it was having with its new software system.
The suit is pending in U.S. District Court for Idaho and aims to represent the pension fund and any investors who bought shares of the company’s’ common stock between July 2023 and April 2024. Share prices fell 30% in the wake of the news.
Share prices fell another 28% in July, when Lamb Weston reported disappointing earnings for its 2024 fiscal year, which ended on June 30.
The sell-off earned Lamb Weston the dubious honor of being Wall Street’s biggest loser of the day in a season beset by disappointing financial reports.
On Oct. 1, its stock was trading at $64.91 on Oct. 1., down from its 52-week high of $111.88. (NYSE: LW)
