Dive Brief:
- Kraft Heinz laid off 200 salaried workers across the U.S. and Canada, according toCrain’s Chicago Business. The dismissals included white-collar workers at its headquarters in Chicago and Pittsburgh.
- The company said the layoffs were part of its continued business unit consolidation and will help it reinvest in its business in ways that benefit the consumer.
- Last year, Kraft Heinz cut 1,000 jobs, putting it more than halfway toward its goal of trimming its payroll by 5,150 jobs.
Dive Insight:
Ever since the eye-opening 2015Kraft Heinz merger— orchestrated by Warren Buffett’s Berkshire Hathaway and 3G Capital Partners — the combined company has been cutting what it sees as bloated costs and grow its earnings. One of its primary tactics for growth iszero-based budgeting, where employees have tojustify all expensesand cannot rely on previous spending.
The recent round of layoffs was part of its goal of slashing 5,150 jobs. Some might see this as a reaction to itsfailed Unilever acquisitionearlier this year, but analysts believe the move is more about trying to reach its long-term staffing reduction goal.
The job cuts also come after its announcement to slash an additional $200 million in annual expenses, on top of the $1.5 billion the company targeted after the merger. Kraft Heinz also has pledged toachieve 15% cuts in greenhouse gas emissions, energy consumption, water use and solid waste sent to landfills as part of a sustainability promise.
Still, there is little doubt companies in the food and beverage sector are looking to get leaner. Kellogg recently announced 1,100 workers wouldmost likely be losing their jobsin an effort to help the company improve efficiency.Coca Cola,General Mills,PepsiCo,TreeHouse FoodsandKroger Co., havehad to slash jobs or close plantsin efforts to be more profitable. With food companies struggling to increase revenue and profit margins while at the same time wooing finicky millennials, expect them to keep looking for ways to save money even if that means laying off more workers.
