Following the merger of Kraft Foods Group Inc and H.J.Heinz Co last month, the management team of the new company Kraft Heinz Co has announced its plans to cut around 2,500 jobs in North America to restructure and increase the efficiency of the business.
Kraft Heinz has revealed that 700 of the jobs to be axed will be in Northfield, Illinois, which was previously the location of Kraft’s headquarters, and will continue to act as one of the two headquarters of the new company. Kraft Heinz has remained silent on where the other cuts would be, but according to spokesperson Michael Mullen, they would all be salaried positions and that no factory workers would be laid off. Other provisional cost-cutting measures that workers were recently encouraged to implement include printing double-sided and reusing office supplies.
Berkshire Hathaway and 3G Capital were the two investment firms which organised the merger and therefore the cuts come as little surprise given that 3G Capital is notorious for its strict controls on business costs. Executives at Kraft Heinz plan to reduce the new company’s annual budget by $1.5 bn through job cuts, enabling them to re-channel funds back into the company’s products.