San Leandro mattress plant closing as Serta Simmons lays off 150 workers

Workers move inventory at the huge warehouse of Zinus, an online mattress company headquartered in San Leandro, Ca., as seen on Friday Nov. 17, 2017. Workers move inventory at the huge warehouse of Zinus, an online mattress company headquartered in San Leandro, Ca., as seen on Friday Nov. 17, 2017. Photo: Michael Macor, The Chronicle Buy photo Photo: Michael Macor, The Chronicle Image 1 of / 3 Caption Close San Leandro mattress plant closing as Serta Simmons lays off 150 workers 1 / 3 Back to Gallery

As online competition reshapes one sector of retail after another, Serta Simmons Bedding, North America’s largest bedding manufacturer, said it will shut down its San Leandro plant and lay off 153 production workers.

The decision came as part of the Atlanta company’s evaluation of its cost structure and manufacturing operations, Serta Simmons said. The facility on Fairway Drive made Serta and Simmons Beautyrest mattress products. The company has operated in San Leandro since at least 1988, according to city records.

“As part of this evaluation, we’ve made the difficult decision to close our San Leandro plant and transfer this volume to other plants,” the company said.

While Serta Simmons is closing some locations, it is opening others as part of a $100 million investment in its manufacturing operations. This month, it opened a plant in Moreno Valley (Riverside County).

Workers affected include material handlers, quilters, production supervisors and those who assemble the mattresses, according to a letter that a Serta Simmons subsidiary filed with the state’s Employment Development Department this month. The first layoffs will take place on July 15, according to the letter. Serta Simmons said it will give the affected workers severance and provide additional support.

“When a company has been here for a long time, it’s never our first choice to see them move on,” said Jeff Kay, San Leandro’s interim city manager, adding that the city will also help the workers find jobs.

Simmons, which originally owned the San Leandro plant, went bankrupt in 2009 and was purchased by the private-equity owners of Serta, which merged the companies. Serta Simmons and other traditional mattress makers face increasing competition from online sellers like Casper, Leesa and Zinus.

San Leandro has had a long history in manufacturing. Ghirardelli chocolate is made there, and there are other areas in town zoned for industrial uses such as 3-D printing, Kay said. The unemployment rate in San Leandro is relatively low at 2.8 percent, and there are local businesses that are looking for more job candidates, he said.

Zinus is also based in San Leandro, blocks away from the plant being closed.

Filling the real estate space left behind by Serta Simmons will not be difficult, Kay said.

“Whenever a large space comes on the market, there is a strong interest,” he said. “It will not be long before there is a new tenant in there.”

Wendy Lee is a San Francisco Chronicle staff writer. Email: wlee@sfchronicle.com Twitter: @thewendylee