Phillips-Medisize laid off nearly 100 employees on July 12 after a “major customer” informed the company it would “immediately and substantially reduce the production of its products,” at its Hudson location, according to the Worker Adjustment and Retraining Notification (WARN) the company submitted to the Wisconsin Department of Workforce Development.
The company is a front-end design, development and manufacturing company for highly regulated industries, such as pharma and med tech.
Phillips was unable to identify the customer referenced in the letter, as the company has a policy not to disclose customer information, according to Sally Hoffman, a marketing communication representative at Phillips.
The Star Tribune, however, spoke to one of Phillips' customers: Juul, an e-cigarette producer.
“A spokesman for Juul Labs confirmed that it is the company referenced in the letter. The Washington, D.C.-based firm previously acknowledged that it contracts with Phillips-Medisize to make e-cigarette components,” the Star Tribune reported.
Earlier this summer, the Food and Drug Administration instructed Juul to cease sales of its e-cigarettes in the U.S.
This jolt to the e-cigarette market comes just over four years after Phillips broke ground at its location at St. Croix Meadows, a redevelopment in Hudson. At that time, the company expected to employ over 250 people at the location.
In the WARN letter, leadership at Phillips cautioned about a potential 225 additional layoffs should the customer cease all production.
“No additional layoffs are planned at this time,” Hoffman told the Star-Observer in an email on Friday, Aug. 19. “That would change only if there is a significant change in customer demand.”
Despite the layoffs in Hudson, the company has openings at other facilities.
“All 99 employees affected by the July 12 reduction were offered other roles at Phillips-Medisize locations in Wisconsin and 64 accepted them,” Hoffman said.
Currently, there are 75 openings across the seven Wisconsin facilities.
The Hudson location is one of 26 Phillips-Medisize facilities around the world, including New Richmond, Menomonie and Eau Claire.