J.R. Simplot Company to layoff 1,600 employees

About 1,600 people ultimately could lose their jobs because of the J.R. Simplot Co.'s decision to consolidate three Idaho potato-processing plants into a newly built one.

The company plans to lay off at least 800 employees in Nampa, Caldwell and the small southeast Idaho town of Aberdeen. That's about one-fourth of Simplot's Idaho workforce.

A Boise economist says one layoff actually can cost two jobs because of the ripple effects caused by the loss of one worker's income.

The layoffs are bad news for an Idaho economy that remains weak despite the slight uptick in Idaho's employment reported last month.

The company said Thursday that it will close its aging plants in Nampa and Aberdeen, and build a new, more modern plant in Caldwell to replace the plant there.

The three plants produce items like potato nuggets, hash browns and french fries sold to restaurants and through distributors around the world.

"We struggled with this very difficult decision, and we know the closures will have an impact on many of our employees and their families," CEO Bill Whitacre said.

Despite the loss of jobs, Caldwell Mayor Garret Nancolas said things could have been worse for Caldwell, pointing to the millions of dollars that will be invested in the new plant.

"From an investment standpoint, that means they are going to be in Caldwell for years and years and years to come," he said. "There is the good news in the midst of the not so good news."

The company expects to lay off workers over the next two to three years. Construction on the new plant is expected to begin in May and be completed by 2014. It will employ 250 people.

Company officials say they hope to hire about 200 of the 250 workers for the new plant from the 1,000 employees now working in the three plants. Exactly who will be hired isn't yet known, spokesman David Cuoio said.

What kind of jobs are being lost?

They range from hourly production-line jobs to salaried managers and supervisors, Cuoio said.

The Caldwell plant will have to close to allow for construction of the new plant. Those jobs will likely be eliminated first, although the timing is unclear, Cuoio said.

Simplot employs about 10,000 people around the world, including 3,300 in Idaho.

If Simplot lays off 800 people, how does that result in 1,600 jobs being lost?

It's called the multiplier effect. As employees are laid off, they will spend less at local grocery stores, gas stations and restaurants. That could result in those businesses downsizing.

Source: iStockAnalyst