Kraft Heinz announced layoffs this week of about 2,500 jobs connected with a plan to cut $1.5 billion in costs by 2017 after the merger of the two food giants last month.
Employees learned of the layoffs via email on Wednesday, with 700 of the cuts coming from Kraft's headquarters in suburban Chicago. The company said layoffs will happen at its
facilities in the United States and Canada, according to Crain's Chicago Business.
"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," Kraft spokesman
Michael Mullen wrote in an email, the Chicago Tribune reported.
"We have developed a new streamlined structure for our organization to simplify, strengthen, and leverage the company's scale. This new structure eliminates duplication to enable faster decision-making, increased accountability, and accelerated growth," Mullen continued.
The layoffs are just the latest job-cutting step by the company, wrote the Tribune. Heinz, located in Pittsburgh, had cut more than 7,000 jobs, representing 20 percent of the workforce, over the past 18 months since being bought by Berkshire Hathaway and private-equity firm 3G Capital.
"Kraft Heinz, like other big food companies, faces an uphill battle to boost sales with conventional packaged foods that are losing traction as U.S. consumers seek out fresher food with
simpler ingredients," wrote Annie Gasparro, of The Wall Street Journal.
"The Kraft Heinz stable includes Velveeta cheese, Jell-O desserts and frozen Bagel Bites. For the quarter leading up to their merger, Kraft and Heinz each reported sales declines, but the company didn't provide a further outlook on the business, which is the fifth-largest food company in the world by sales," Gasparro continued.
The departures have reached the highest level of the company with many of Kraft's top executives bolting from the company after the merger with Heinz was completed, according to the Tribune.
"The company is focused on the difficult and challenging process of integrating our two businesses," Kraft Heinz chief executive officer Bernardo Hees said of the latest layoffs. "We have a lot of hard work ahead of us as we continue to design our new organization, always putting our consumers first."
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