The announcement came just over five weeks after the deal to combine Kraft with Heinz was formalized on July 2, and two days after CEO Bernando Hees reiterated a promise to “generate aggressive, run-rate cost savings of $1.5bn by the end of 2017” after unveiling Q2 results at the two grocery giants.
Given that Heinz has already slashed almost a quarter of its workforce since April 2013 as private equity owners 3G and Berkshire Hathaway sought to reduce costs, significant cuts at Kraft have been widely expected.
A new streamlined structure
Michael Mullen, SVP, corporate & government affairs, said the company had created a “new streamlined structure” that would “simplify, strengthen and leverage” its scale and eliminate duplication “to enable faster decision-making, increased accountability and accelerated growth”.
He said: “We have made the very difficult but necessary decision to eliminate approximately 2,500 positions across the U.S. and Canada. Of the total, approximately 700 employees are from the Kraft Heinz Company Northfield headquarters.”
Asked which corporate functions were most impacted, he told FoodNavigator-USA: "Most of the impacted employees are on the Kraft side as Heinz has already done the important work of streamlining its organization over the past two years. Impact is across all corporate functions."
Generous severance benefits
The company is offering “generous severance benefits with a minimum of six months and outplacement services to make this transition as smooth as possible, and to help impacted employees pursue new career opportunities”, he added.
“These necessary actions will better position the company for future growth. Furthermore, these efforts position our company to realize substantial synergies that will drive savings to be reinvested in our brands and products.”