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Building Innovation is a collection of stories by 90.5 fm WESA reporters about the Pittsburgh region focusing on efficient government operation, infrastructure and transportation, innovative practices, energy and environment and neighborhoods and community.

Kraft Heinz Cutting 2,500 Jobs; Impact In Pittsburgh Said To Be Minimal

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AP Photo/Toby Talbot, File
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On Wednesday, Aug. 12, 2015, Kraft Heinz announced it is cutting about 2,500 jobs as part of its plan to slash costs after the food companies combined.

Kraft Heinz has announced it is cutting about 2,500 jobs in the U.S. and Canada. The move comes as the company seeks to cut costs following the Kraft and Heinz merger earlier this year. The impact on Pittsburgh will be minimal, according to Kraft Heinz spokesman Michael Mullen.

“As part of the integration, some employees will move from Pittsburgh to Chicago and likewise, some employees will move from Chicago to Pittsburgh,” said Mullen. “Heinz will continue to have a significant presence in the Pittsburgh area.”

About 700 of the cuts are coming in Northfield, Illinois, where Kraft had been headquartered. The company says cuts are taking place in marketing, finance and sales, adding all affected jobs are salaried and none of the job cuts involve factory workers.

Mullen said affected workers were to be notified in person. The Kraft Heinz Co. said it had a total of around 46,600 employees before the cuts. That included about 1,900 in Northfield.

“The Leadership Team has examined every aspect of our business to ensure we are operating as efficiently and effectively as possible,” said Mullen. “We have developed a new streamlined structure for our organization to simplify, strengthen and leverage the company’s scale. This new structure eliminates duplication to enable faster decision-making, increased accountability and accelerated growth. “

The combination of Pittsburgh-based Heinz and Kraft earlier this year was engineered by Warren Buffett's Berkshire Hathaway and Brazilian investment firm 3G Capital, which has become known for its tight cost controls. Bernardo Hees — a 3G partner — is CEO of the merged Kraft Heinz.

Hees had already overseen cost-cutting at Heinz since the ketchup maker was taken over in 2013 in a prior partnership between 3G and Berkshire. That means the cuts announced Wednesday mostly affect people on the Kraft side of the business.

Kraft Heinz had been belt-tightening in recent weeks. In a memo to employees dated July 13, Hees outlined a variety of "provisional measures" the company was taking to avoid unnecessary spending. That included instructing workers to print on both sides of paper, reuse office supplies like binders and file folders, and turn off computers before leaving the office. Corporate donations to charities also had to be approved, as did memberships in industry associations, the memo said.

At its office in Northfield, the company also stopped providing free Kraft snacks like Jell-O.

Together, the two U.S. food giants own brands including Jell-O, Heinz baked beans and Velveeta that are facing sales challenges; executives said they expect to save $1.5 billion in annual costs by 2017.

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