Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Heinz Says Severance Cost Climbs to $300 Million

Don't Miss Out —
Follow us on:

Dec. 11 (Bloomberg) -- HJ Heinz Co., the ketchup maker taken private this year by Warren Buffett’s Berkshire Hathaway Inc. and Jorge Paulo Lemann’s 3G Capital, almost doubled its projection for severance costs after cutting more jobs.

Severance will cost about $300 million for the fiscal year that began in late April, the Pittsburgh-based company said today in its second-quarter regulatory filing. That compares with the $160 million projection three months ago when the 2014 “productivity initiative” had eliminated about 1,200 jobs.

The number of jobs targeted climbed to 2,000, according to today’s filing and the company projects $250 million in annual savings. Heinz said last month it would fire 1,350 people as it closes plants in Florence, South Carolina; Pocatello, Idaho; and Leamington, Ontario. Bernardo Hees, who became chief executive officer in June, has been cutting costs to help pay down the $12.6 billion in borrowing supporting the deal.

“The tomatoes are going to go to the plants that have the low production costs, when you get right down to it,” Buffett said last month at an event in Detroit. “It’s really a question of having an unprofitable plant and concentrating production in a more profitable plant.”

Heinz had about 32,000 employees at the end of its last fiscal year. Buffett holds $8 billion in preferred stock that receives a 9 percent dividend, or $720 million a year.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.