The Star-Kist tuna cannery, the largest employer in the US territory of American Samoa, said Monday it was laying off workers and scrapping most workers' benefits due to rising costs.
Star-Kist employs about 2,000 workers in the territory of 57,000 people and has been hurt by US legislation, which has lifted wages in American Samoa by nearly a third in the last 18 months.
The company, owned by South Korea's Dongwon Industries, said it was eliminating 20 full time jobs and abolishing paid holidays, pension benefits and other benefits for other workers.
"Star-Kist is making these changes to avoid a reduction in processing employment at the facility in the near term," the company said in a statement.
The company said its prospects were also being hurt by uncertain federal tax treatment of American Samoan revenues, and falling tuna prices.
Dongwon acquired Star-Kist from US company Del Monte Foods in October, when it said it would "continue to evaluate the economic viability of operations in American Samoa."
Under legislation passed by the US Congress last year, workers in American Samoa will receive an annual 50 cents an hour wage rise until the local minimum wage reaches the mainland rate of 7.25 US dollars an hour.
Another US company, Chicken of the Sea Samoa Packing, has previously laid off staff at its American Samoa plant, which now has 1,700 workers.
