Kraft Heinz to eliminate 2,500 jobs
by Keith Nunes
Approximately 700 positions will be eliminated at the company’s co-headquarters in Northfield, Ill.
PITTSBURGH — The Kraft Heinz Co. plans to lay off 2,500 employees working for the company in the United States and Canada. Approximately 700 positions will be eliminated at the company’s co-headquarters in Northfield, Ill.
“As we work to build something special at The Kraft Heinz Co., the leadership team has examined every aspect of our business to ensure we are operating as efficiently and effectively as possible,” said Michael Mullen, senior vice president of corporate and government affairs. “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.”
Earlier this week, the new company issued its first quarterly earnings report. The Kraft Heinz Co. said sales fell 4.9 percent at Northfield, Ill.-based Kraft Foods Group, Inc. and 4.1 percent at H.J. Heinz Holding Corp. prior to the completion of the merger in July. Lower prices and weak demand hurt Kraft in the quarter, while Heinz’s results were affected by unfavorable currency translation.
For the second quarter ended June 27, Kraft Foods had net earnings of $551 million, or 93c per share on the common stock, up from $482 million, or 81c per share, for the year-ago period. The company recorded expenses of $56 million in cost savings initiatives and $37 million of merger-related costs that were partly offset by $20 million in unrealized gains on hedging activities within cost of sales and a gain on sale of assets of $21 million.
Net revenues were $4,515 million, which compared with $4,747 million the year before, reflecting a negative impact from foreign currency translation, lower sales of ready-to-drink beverages from decreased promotional activity and lower net pricing in the cheese and food service businesses, which were partially offset by pricing increases taken in previous quarters.
For the second quarter ended June 28, Heinz sustained a loss of $164 million, which compared with net income of $127 million the year before. Adjusted earnings before tax, interest, depreciation and amortization increased 6.7 percent to $739 million, driven by increased sales in North America and Venezuela and cost savings initiatives that were partially offset by unfavorable currency translation and increased marketing spending in North America.
Sales slipped 4.1 percent to $2,616 million from $2,729 million, as the negative impact of foreign exchange translation and a reduction from the divestiture of a frozen food business in the United Kingdom more than offset benefits of higher pricing across all segments and volume gains in the United States.