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article imageKraft Heinz cuts 2,500 jobs in Canada, U.S. after recent merger

By Megan Hamilton     Aug 13, 2015 in Business
Chicago - Saying that it intends to cut costs, Kraft Heinz Co. is slashing about 2,500 jobs now that the two companies have merged.
Employees affected by this are in the U.S. and Canada and will be notified in person, said spokesman Michael Mullen.
Around 700 of the cuts will be in Northfield, Illinois, where Kraft was headquartered, The Associated Press reports.
The company offered no specifics as to where other cuts will take place but said that all of the jobs being cut were salaried and none of the cuts involved factory workers.
Kraft Heinz reports that it had a total of about 46,000 employees prior to the cuts. This included around 1,900 in Northfield.
When Kraft and Heinz completed the merger in early July, job cuts were already widely expected, CNN Money reports.
In an email, Mullen said that the layoffs were being conducted to "ensure we are operating as efficiently and effectively as possible."
It was a "very difficult, but necessary, decision," he added.
Last month's merger of Kraft Foods Group, Inc., and H.J. Heinz Co. was orchestrated by Heinz owners 3G Capital Partners LP and Berkshire Hathaway, Inc.'s Warren Buffett, The Wall Street Journal reports.
Warren Buffett  Chairman and CEO of Berkshire Hathaway  in Detroit  Michigan on November 25  2013
Warren Buffett, Chairman and CEO of Berkshire Hathaway, in Detroit, Michigan on November 25, 2013
Bill Pugliano, Getty/AFP/File
Wednesday's layoff announcements weren't the first time Kraft employees have been impacted by their new owners. Just days before the merger was completed, the predecessor companies reported that executives from Heinz would take over eight of the top 10 positions at the newly merged company. Then last month, Kraft Heinz announced it planned to move Kraft employees from the suburbs to an office space in downtown Chicago that is about one-fourth the size of the offices in Northfield.
The food giant is now the third largest food company in North America due to the merger and it owns such brands as Jell-O, Heinz baked beans, and Velveeta, BBC News reports.
The merger was considered to be a good deal because it meant manufacturing and distribution could be combined, thus saving millions of dollars each year.
"The new structure eliminates duplication to enable faster decision-making, increased accountability and accelerated growth," Mullen said in a statement.
3G has a well-established reputation for jumping right in to cut costs and eliminate jobs after it acquires a company, CNN Money reports.
Layoffs followed at Anheuser-Busch InBev not long after 3G lead the merger of Budweiser maker and Stella Artois brewer.
There were job cuts at Burger King when 3G took the reigns in 2010 and at Canadian coffee and doughnut chain Tim Hortons when 3G merged it with Burger King last year to create Restaurant Brands.
The same thing also happened at Heinz shortly after the 3G/Berkshire takeover.
Employees affected by the layoffs, including those who worked in sales, marketing, and finance, will be given severance benefits of at least six months, Mullen said, The Associated Press reports.
Kraft Heinz has done other types of belt-tightening as well in the last few weeks.
A memo sent out by Bernardo Hees, a 3G partner who is now the CEO of Kraft Heinz, outlined "provisional measures" the company was taking to cut unnecessary spending. Workers were instructed to print on both sides of paper, and to reuse office supplies like binders and file folders, and to turn off computers when leaving the office. Corporate donations and membership in industry associations would have to be approved, the memo said.
Company executives say they are hoping to save $1.5 billion in annual costs by 2017.
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