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After winning bankruptcy court approval to close down its business, began the process of shuttering its 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores resulting in the loss of 18,500 jobs.

Among other provisions, the court order provides Hostess Brands with added liquidity through an amended debtor-in-possession financing agreement and consensual use of cash collateral; and authorizes the company to implement a non-executive employee retention plan to ensure the company has the necessary personnel to wind down its operations.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said Gregory F. Rayburn, chief executive officer. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”

In addition to dozens of baking and distribution facilities around the country, Hostess Brands will sell its popular brands. Bidders have already started to emerge. This week, Cookies & Sweets Bakeries with headquarters in Pine Bluff, AR, filed a motion with the courts to buy Hostess Brands. The bakery said it would take itself public in December, which would allow it to offer employee stock options and it would set up a new headquarters in to run the business.

Another potential buyer could be Flowers Foods Inc. Moody’s Investors Service said a liquidation of Hostess would be credit positive for Flowers Foods because the fresh bakery company would likely purchase some of Hostess’ bakery assets, which would allow it to accelerate its expansion in the northern United States.

Flowers recently stepped up its acquisition activity to accelerate expansion beyond its core territories in the U.S. South. The company expects acquisitions to generate 2%-5% of its annual sales growth. Last March, the company raised $400 million in senior unsecured notes partly to fund acquisitions. In July, Flowers completed the acquisition of Lepage Bakeries Inc., an Auburn, ME-based regional producer of breads, rolls, and donuts, for $370 million. The acquisition was Flowers’ largest to date, and completed its US east coast distribution coverage through Maine.

Hostess Plant Status

Birmingham, AL: Closed
Anchorage, AK: Closed
Los Angeles, CA (Hostess): Closed
Los Angeles, CA (Dolly): Closed
Oakland, CA: Closed
Sacramento, CA: Closed
Denver, CO: Closed
Jacksonville, FL: Closed
Orlando, FL: Closed
Columbus, GA: Closed
Hodgkins, IL: Closed
Peoria, IL: Closed
Schiller Park, IL: Closed
Columbus, IN: Closed
Indianapolis, IN: Closed
Waterloo, IA: Closed
Emporia, KS: Closed
Lenexa, KS: Closed
Alexandria, LA: Closed
Biddeford, ME: Closed
Boonville, MO: Closed
St. Louis, MO: Closed
Billings, MT: Closed
Henderson, NV: Closed
Wayne, NJ: Closed
Rocky Mount, NC: Closed
Cincinnati, OH: Closed
Defiance, OH: Closed
Northwood, OH: Closed
Tulsa, OK: Closed
Philadelphia, PA: Closed
Knoxville, TN: Closed
Memphis, TN: Closed
Ogden, UT: Closed
Salt Lake City, UT: Closed
Seattle, WA: Closed

 


P&G Nearly Doubling Layoff Projections

Procter & Gamble reiterated its plans to shave about $6 billion from its cost of goods sold, $1 billion from marketing efficiencies and $3 billion from core selling, general and administrative (SG&A) overhead costs. In doing so, it upped the number of job positions it plans to eliminate.

Earlier this year, Cincinnati-based P&G said it was targeting non-manufacturing employment reductions of 5,700 positions by the end of fiscal year 2013.

Now, P&G is upping the layoff number an additional 2% to 4% per year through fiscal years 2014 to 2016 to strengthen its ability to achieve its savings objectives. That would amount to additional job reductions of from 2,280 to 4,560 positions.

 


To Cut 5% of Workforce

Texas Instruments (TI) plans to reduce costs and focus investments in its wireless business on embedded markets with greater potential for sustainable growth. Cost reductions include the elimination of about 1,700 jobs worldwide. The layoffs amount to about 5% of the Dallas-based ’s total workforce.

TI estimates that these actions will be substantially complete by the end of 2013. Total charges for these actions are estimated to be about $325 million.

As a result of these actions, TI expects annualized savings of about $450 million by the end of 2013.

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