Chipotle meat supplier – OSI cuts China unit staff as fallout continues over food safety scandal

OSI cuts China unit staff as fallout continues over food safety scandal

By Rita Jane Gabbett on 9/22/2014

OSI Group announced Sunday evening that OSI China would lay off 340 workers at its Shanghai Husi Food Co. unit, effective today.

The move comes two months after a Chinese television reporter went undercover at the plant and reported expired meat being used to make products typically sold to McDonalds and Yum Brand’s KFC restaurants in China.

The layoffs affect 226 workers directly employed by Shanghai Husi and 114 contractors to Shanghai Husi.

OSI China has notified affected workers and advised them of their available options. Since July 21, 2014, most of these workers have been on paid leave.

“It was our expectation that they could resume their work as soon as possible. Unfortunately, due to circumstances beyond our control, this will not be the case,” an OSI statement explained.

Over the past two months, Shanghai Husi has experienced significant financial and customer losses and the authorities’ investigations are still ongoing.

“It is very unlikely that production will be resumed soon,” the OSI statement predicted.

A small number of staff, however, must be retained in order to assist with the ongoing authorities’ investigations. As such, Shanghai Husi cannot be fully shut down at this stage.

OSI is working closely with government agencies to ensure the workers receive severance payments in accordance with all applicable laws, as well as company policies. The company is also working closely with local government agencies to provide support to affected workers, including career development coaching, job search, and skills training.