Winston-Salem, NC -- Reynolds American spokeswoman Maura Payne confirmed Wednesday morning that some employees were laid off from their manufacturing facility in Tobaccoville.
Payne would not provide any specific numbers regarding the layoffs saying they would release that information once the evaluation process is complete. That's expected to take until the end of March.
Tuesday's cuts were characterized by the company as involuntary layoffs. Payne said the company did offer the remaining workers at the plant the option to take voluntary severance. That would amount to 2 weeks of pay for every year of service, up to a maximum of 78 weeks.
Last month, Reynolds announced that layoffs were expected as they were conducting a comprehensive review of the company. That process is expected to last through the entire first quarter.
Tuesday, WFMY News 2 received emails and tweets from workers impacted by the layoffs. Reynolds at that time would not confirm the layoffs saying they could not comment prior to the release of the earnings.
In the earnings report released Wednesday morning, Reynolds American President and CEO Daniel Delen acknowledged the evaluation process.
"In 2012, we intend to sustain our operating companies' key-brand momentum, invest in innovation and have the financial flexibility to take advantage of competitive opportunities,"
CEO Daniel Delen said. "As a result, we believe it is prudent to once again review key activities and resources to ensure they are aligned with today's economic and competitive landscape. A
comprehensive analysis of programs, activities and organizational structures at RAI, RAI Services and most departments within R.J. Reynolds is currently under way. This review is expected to be completed by the end of the first quarter."
Reynolds American said fourth-quarter profits rose 16 percent as higher prices and productivity gains helped offset declining cigarette sales.
The company reported net income of $304 million, or 52 cents per share, for the period ended Dec. 31. That's up from $262 million, or 45 cents per share, a year ago. Adjusted earnings were 72 cents per share.
The maker of Camel, Pall Mall and Natural American Spirit brand cigarettes said revenue excluding excise taxes was flat at $2.08 billion. Analysts expected earnings of 68 cents per share on revenue of $2.04 billion.
Reynolds said they sold about 7 percent fewer cigarettes than a year ago. Volume for its smokeless tobacco brands that include Grizzly and Kodiak rose 6 percent.
Winston-Salem Chamber of Commerce President, Gayle Anderson said the local economy is diversified enough to handle the losses whatever the final number may be.
"The economy is really starting to pick up again and we're really truly out of the recession. We have more existing business clients who are planning to expand than we've had in the last five years," said Anderson.
Still others are worried. Jeff Harris owns and runs King's Hot Dogs on Highway 65 in Winston-Salem. Workers at the Tobaccoville Plant are regular customers.
"You're always worried about your job this day and age. I'm sure those guys are really concerned. We worry about them. We'll have to see how it turns out. It affects us as well, but it affects them a little more," shared Harris.
Depending on the number of people let go, Reynolds American may have to file a notice with the Department of Commerce. If 100 or more workers are displaced, the deparment forms a rapid response team to help employees. So far, the company has not filed any notice with them.