After writing yesterday about how labour costs have played a huge role in Hostess’ bankruptcy, we received an email from a long-time Hostess employee. Here’s what he said:
“Our CEO claims that more concessions are needed to get the company back in the black. Two years ago they were quite satisfied as they were granted concessions to the tune of about $60,000,000 per year between wage cuts and health insurance co-pays. Since then, they have outsourced almost 90% of office work as well as have decided to stop contributing to our pension.
There’s another approximate $100,000,000 per year if you use 20,000 employees multiplied by $100 per week. And labour has been cut to the point where I personally have 2,3,4 jobs a day now. But we don’t see management being cut proportionately and in fact have seen muddle management jobs added. Why? We have too many production supervisors and too many maintenance supervisors. … We have poor business practices that will never be relieved by concessions from labour.”
The employee also sent us a copy of the memo Hostess CEO Brian Driscoll sent to all of the company’s 19,000 employees last week: