|McDonald's was one of several chains to cut ties with OSI China.|
AURORA, ILL. – OSI China announced plans to lay off 340 workers at the unit's Shanghai Husi facility that was at the center of a major food safety scandal in China.
"Over the past two months, Shanghai Husi has experienced significant financial and customer losses and the authorities' investigations are still ongoing," the company said in a statement. "It is very unlikely that production will be resumed soon. A small number of staff however, must be retained in order to assist with the ongoing authorities' investigations – as such, Shanghai Husi cannot be fully shut down at this stage."
OSI China notified affected workers and advised them of available options. A total of 340 workers will be laid off — 226 are directly employed by Shanghai Husi and 114 are contractors, according to OSI China. Most of the workers have been on paid leave since July 21.
Food safety authorities in Shanghai suspended operations at the plant after a television report showed workers picking up meat from the plant floor and mixing fresh meat with expired meat. Despite swift action from OSI Group and an apology from OSI CEO Sheldon Lavin, Burger King, Yum! Brands, McDonald's and other major customers, severed business ties with OSI China. News reports say OSI’s troubles in China are part of a pattern of heightened scrutiny by government officials and state-run media that has dragged on foreign business interest in China.
"This is a difficult decision for a responsible employer like OSI," the company said in a statement. "Besides the compensation package, we are also working closely with local government agencies to provide support to affected workers, including career development coaching, job search and skills training."