Kraft Heinz cutting 2,500 jobs in U.S. and Canada
NEW YORK — Kraft Heinz says it is cutting about 2,500 jobs as part of its plan to slash costs after the food companies combined.
Spokesman Michael Mullen says affected workers are in the U.S. and Canada and were to be notified in person. About 700 of the cuts were coming in Northfield, Ill., where Kraft had its headquarters.
The company would not specify where other cuts were taking place, but said that all the jobs are salaried. It said that none of the job cuts involved factory workers.
The Kraft Heinz Co. said it had a total of around 46,600 employees before the cuts. The job cuts are not surprising, given the reputation of the company’s management on Wall Street.
The combination of Heinz and Kraft this year was engineered by Warren Buffett’s Berkshire Hathaway and Brazilian investment firm 3G Capital, which has become known for its tight cost controls.
Bernardo Hees — a 3G partner — is CEO of the merged Kraft Heinz.
Hees had already overseen cost-cutting at Heinz since it was taken over in 2013 in a partnership between 3G and Berkshire. That means the cuts announced Wednesday mostly affect people on the Kraft side of the business.
Together, the two U.S. food giants own brands including Jell-O, Heinz baked beans and Velveeta that are facing sales challenges amid changing tastes. Their combination was nevertheless seen as attractive because of the opportunity to combine functions like manufacturing and distribution.
Executives say they expect to save $1.5 billion annually by 2017. In a statement, Mullen said job cuts are part of the company’s process of “designing our new organization.” “This new structure eliminates duplication to enable faster decisionmaking, increased accountability and accelerated growth,” Mullen said. He said the savings will free up money to be invested back into products.
Affected employees, who worked in jobs such as sales, marketing and finance, will be given severance benefits of at least six months, Mullen said.
Already, Kraft Heinz had been belt-tightening in recent weeks. In a July 13 memo, Hees outlined “provisional measures” the company was taking to avoid unnecessary spending.