Kraft layoffs announced on Wednesday are expected to include about five percent of the company’s workforce — about 46,000 employees. The 2,500 jobs being cut will reportedly be spread across the United States and Canada.
The Kraft layoffs were reportedly anticipated after Heinz bought a 51 percent interest in the company in March. Warren Buffett and 3G Capital, a private equity firm based out of Brazil, brokered the deal. The management group reportedly has a reputation for “aggressive cost cutting.”
When 3G Capital brokered the InBev (Brazilian beer manufacturer) St. Louis Anheuser-Busch takeover in 2008, about 1,400 jobs were axed. InBev executives were quickly placed in leadership positions after the takeover, beer industry consultant Tom Pirko said. The consultant also added that the Brazilian beer executives are not known for their “gentle demeanor.”
“The company is focused on the difficult and challenging process of integrating our two businesses,” Bernardo Hees, Kraft Heinz chief executive officer, said. “We have a lot of hard work ahead of us as we continue to design our new organization, always putting our consumers first.”
When the Kraft and Heinz merged, 3G named Hees, a 3G partner who was running Heinz, and ran Burger King, to be the new CEO of the combined company. Kraft Heinz reportedly plans to cut $1.5 billion in costs by 2017, so more Kraft layoffs could be looming on the horizon.
The Kraft layoffs and cost-cutting measures reportedly began in July after a memo was sent to workers. The staffers were reportedly informed to begin printing on both sides of paper in an effort to conserve office supplies. Free Jell-O perks at the Kraft headquarters have also ceased.
Michael Mullen, a spokesman for Kraft Heinz, said that the cuts are all part of a restructuring designed to eliminate duplication and “enable faster decision-making, increased accountability,” and to accelerate growth. Pittsburgh-based Heinz cut more than 7,000 jobs (20 percent of the workforce) over the past 18 months after being purchased by Berkshire Hathaway and the 3G Group, according to a NewsMax report.
“As we work to build something special at the Kraft Heinz Company, the leadership team has examined every aspect of our business to ensure we are operating as efficiently and effectively as possible,” Mullen added.
[Image via Shutterstock]