SPRINGDALE, Arkansas: Tyson Foods said it will close two US chicken plants and lay off some 1,700 employees on 12th May, it was announced on March 14.

The statement added that Tyson will close its plant in Glen Allen, Virginia, with 692 employees, and its other plant in Van Buren, Arkansas, with 969 employees.

The company said that as part of a strategy to utilize the full capacity at each of its facilities, its chicken processing will shift to other plants.

"The current scale and inability to economically improve operations has led to the difficult decision to close the facilities," Tyson said.

In 2022, Arkansas-based Tyson said that due to limited supplies and labor, it was unable to fulfill all chicken orders and planned to increase production. Tyson earlier bought chicken from other producers to meet demand.

However, it wrongly predicted that demand for chicken would be strong at supermarkets in November and December, said Chief Executive Donnie King, on a quarterly earnings call last month.

Meanwhile, Arun Sundaram, senior equity analyst at CFRA Research, said closing plants is difficult, but justified, as Tyson must improve its performance.

"There has been a lot of investor pressure on management about improving the chicken margins," Sundaram said, as quoted by Reuters.

The company's overall sales missed analyst estimates for the quarter ending 31st December, when total operating margins dropped to 3.5 percent from 11.3 percent last year.

The United Food and Commercial Workers Local 400 union, which represents workers at Tyson's Virginia plant, criticized the decision to close the plant.

Mark Federici, Local 400 president, stressed, "These men and women risked their lives and the safety of their families to keep this plant operational during the pandemic, and this is the thanks they get?" according to Reuters.