Buffett-Backed Heinz Cuts 600 Jobs, Pushes AccountabilityNoah Buhayar
HJ Heinz Co., the ketchup maker taken private this year by Warren Buffett’s Berkshire Hathaway Inc. and Jorge Paulo Lemann’s 3G Capital, said it’s cutting 600 office jobs in the U.S. and Canada.
More than half the reduction will be in Pittsburgh, where Heinz is based, according to an e-mailed statement today from Michael Mullen, a spokesman. The ketchup maker will still employ 800 people in the city and 6,000 in North America, he said.
The cuts “will better position the company to support and fund our next chapter,” Mullen wrote. “Our new organizational structure will simplify, strengthen and leverage the company’s global scale, while enabling faster decision making, increased accountability, and accelerated growth.”
Buffett, 82, is betting on 3G to expand the ketchup maker after the $23.3 billion takeover. He said in May that he agreed to the acquisition because of his confidence in Lemann’s firm. Heinz’s new Chief Executive Officer Bernardo Hees shook up management in June, announcing the departure of 11 top executives weeks after completing the deal.
Berkshire and 3G each contributed about $4 billion to get half the equity in Heinz’s new holding company. In addition, Buffett committed $8 billion for preferred shares that pay a 9 percent dividend.
Affected employees will get “enhanced severance benefits” and help with finding new work, Mullen said. The Associated Press previously reported on the Heinz job cuts.
Lemann’s company has shaken up management in past deals. Within two months of buying Burger King Holdings Inc. in October 2010, 3G cut 413 jobs, including workers at headquarters in Miami. It also said it would reduce spending on travel, rent and other items to save $30 million to $40 million a year.
Burger King’s employee count fell about 12 percent to 34,248 from mid-2010 through 2011, according to regulatory filings. Lemann’s firm sold part of its stake in the chain last year in an initial public offering.
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