News 179 views last update:6 Aug 2012

Menu Foods cuts jobs in rebuilding process

Toronto, Canada based Menu Foods is cutting jobs and paring salaries of its senior management as it tries to rebuild operations following the petfood-melamine recall scandal.

Menu Foods said Wednesday it will cut 10 to 15% of its 900-plus workforce, or 90 to 140 employees - victims of its business disruption since the massive mid-March recall.

Meanwhile, the fund's CEO, who at the time apologized to people who lost their pets but declined to name the supplier behind the tainted pet food, took a pay cut, along with other senior executives.

The recall of up to 60 million tins and packages of pet food was the biggest in the industry's history and was provoked by reports of pets falling ill and some dying of kidney failure after eating its products.

In cutting his own compensation by 22%, CEO Paul Henderson said the move was made "with the objective of sharing the pain." Other senior executives and board members will take pay cuts of 17 to 20%.

Class action lawsuit
The number of animals affected from the contaminated petfood is unclear, but Menu foods is expecting to face more than 100 class-action lawsuits.

The upward adjustment in recall expenses is an extra $10 million, bringing the cost to $55 million "principally because the volume of customer returns and associated costs are now estimated to be greater than originally anticipated," the company said.

In addition to the job cuts in the remaining workforce, the restructuring charges involve write-offs of inventory, a customer relationship, receivables and idle assets.

Menu Food's shares were valued at over CAN$7 just before the March recall, closed down to $2.26 on the Toronto Stock Exchange on Wednesday, Oct. 10.

Previous items on this subject:
Canada's Menu Foods fights for its life
Menu Foods loses largest pet food customer
$45 million damage for Menu Foods

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