Business

Morrisville-based tobacco company lays off more than 500 employees in Eastern NC

Pyxus International is laying off 565 workers and will stop processing tobacco at its Farmville facility. Its facility in Wilson will handle the  processing that was done in Farmville.
Pyxus International is laying off 565 workers and will stop processing tobacco at its Farmville facility. Its facility in Wilson will handle the processing that was done in Farmville.

Pyxus International will lay off 565 workers and cease tobacco processing operations at its Farmville facility by Jan. 7, 2019, according to a filing with the North Carolina Department of Commerce

All tobacco processing operations at the company’s Farmville facility, located at 8958 West Marlboro Road, will be moved to the company’s facility in Wilson, 50 miles east of Raleigh. The facility’s seasonal employees will be placed on paid leave beginning in early December.

Pyxus International, formerly known as Alliance One International, is a tobacco company based in Morrisville. Last year, the company generated buzz in the industry when it expanded into the hemp and cannabis business to remedy its financial woes.

However, the majority of the company’s business remains dependent on tobacco sales. The announced layoffs came alongside dismal financial results for the second quarter of 2018: Its net loss rose to $54.6 million or $6.04 per share for the quarter, compared to net income of $1 million, or 11 cents per share in the same quarter a year ago.

In a release, Pyxus cited increased tobacco tariffs and declining demand for exports as reasons for the facility consolidation.

“While this difficult, but necessary, decision results from a confluence of events, we remain committed to the U.S. tobacco industry and continue to work diligently to improve the environment for our contracted growers,” said CEO Pieter Sikkel in the release.

Pyxus stated that although the Farmville facility is not closing, all tobacco processing operations will permanently cease. Moving forward, the facility will be used for “storage and special projects.”

Farmville has been a tobacco town since the early 20th century, when two railroads linked the town with major tobacco markets in Wilson and Durham. The layoffs are part of the industry’s decades-long decline that has spurred the 4,800-person town to work continually toward industrial and commercial diversification since 1956.

This story is from the North Carolina Business News Wire, a service of the UNC-Chapel Hill School of Media and Journalism

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