Mi Pueblo Foods in Atwater will close its doors this summer and lay off 91 employees, the Sun-Star has learned.
The closure was confirmed in a letter sent by the grocery chain’s human resources department to Jerry O’Banion, chairman of the Merced County Board of Supervisors. Layoffs will start Aug. 31, the letter says, and continue for two weeks.
The positions range from service clerks to meat cutters and cashiers, according to the notice. Joanna Zelaya, human resources director for the San Jose-based grocery chain, did not return calls for comment.
According to documents, the Latino grocery chain filed for Chapter 11 bankruptcy protection in July 2013 because of a dispute with Wells Fargo, its primary lender.
Atwater Mayor Joan Faul said she was shocked at the closure announcement, especially because the store was recently remodeled.
“They took a very shabby old place that hasn’t been in service for a number of years and spent a lot of money remodeling it,” Faul said. “It’s going to be a sad day for Atwater, because it was a beautiful store and they did such a nice job.”
Faul said the store served as an anchor for the Bellevue Road shopping center. She said she hopes the employees can find similar jobs at grocery stores in the Central Valley.
The impact on the city will be “tremendous,” Faul said.
In such situations, the Merced County Department of Workforce Investment sends a “rapid response team” to speak with employees and offer them services, such as locating job opportunities, résumé writing classes and skills training.
Director Robert Morris said the Mi Pueblo Foods closure is one of the largest private-sector layoffs he can recall. The loss of jobs could have a ripple effect on Atwater and the county’s economy, he added.
“I think it’s going to have quite an impact because those are people that are getting paychecks and have homes and are buying goods and services,” Morris said. “With the high unemployment rate, where do they go? We’re not like the Silicon Valley where they can just go somewhere else.”
Alfredo Mendoza, a special projects manager with the county Department of Workforce Investment, said Mi Pueblo employees represent a diverse set of workers. Helping them find new jobs may depend on how far they are willing to travel to obtain similar employment.
“It definitely can make it tough, depending on the labor market,” Mendoza said. “We want to get them back into the workforce as soon as possible.”
Mi Pueblo Foods was founded in 1991 in East San Jose. The grocery chain has Central Valley locations in Modesto and Tracy, according to its website. The letter encourages Atwater employees to apply for a transfer to other Mi Pueblo stores that have openings.
Atwater City Manager Frank Pietro said he recalled the company filing bankruptcy last year, but that he was told by the Atwater store manager that “everything would be OK.”
“Then we got this letter a few days ago saying they are shutting the doors down, and I was totally shocked,” Pietro said. “I still can’t believe it. Ninety-one people not working is detrimental, especially for a small community like Atwater.”