Buffett-Backed Kraft Heinz Eliminated Another 1,000 Jobs in 2016By
Kraft Heinz Co. eliminated another 1,000 jobs last year, helping to boost returns for investors including billionaire Warren Buffett.
The maker of Velveeta cheese had 41,000 employees as of Dec. 31, the company said Thursday in a regulatory filing. That compares with 42,000 workers about 12 months earlier.
Kraft Heinz, under the management of 3G Capital, has sought to boost profits through both cost cuts and acquisitions. An attempt to buy Unilever was unsuccessful, however, as the maker of Dove soap rejected its unsolicited $143 billion bid this month. Buffett and 3G took H.J. Heinz private in 2013, slashed jobs and then combined the ketchup maker with Kraft in 2015.
Management is in the midst of a multiyear program to “reduce costs, streamline and simplify our operating structure as well as optimize our production and supply chain network across our businesses in the United States and Canada segments,” the company said in Thursday’s filing.
The plan is to eventually cut 5,150 positions. The company is more than halfway there, with 3,350 eliminated as of Dec. 31.
Kraft Heinz’s management has set the standard for cutting costs in the food industry. This month, the company said it would save $1.7 billion in annual expenses by the end of the year, an increase from the previous target of $1.5 billion. Within months of the merger in 2015, Kraft Heinz announced it would shut seven factories. That plan was later reduced to six facilities.
Kraft Heinz has gained 6.6 percent this year as of 2:24 p.m. in New York. The company rallied 20 percent in 2016.