The newly formed KHC let go of 2,500 jobs in the U.S. and Canada. 700 of those jobs from the headquarters in Northfield, Illinois which only has about 1,900 employees.
The company is not specific about where the other cuts will take place. They did however comment saying that the jobs were all salary jobs. They announced that there would be no cuts with the factory workers.
This merger was engineered by Warren Buffett’s Berkshire Hathaway and 3G. They are known for shrewd cost controls in the business world. The merge also leaves Bernardo Hees, a 3G partner, the CEO of KHC.
Executives say they expect to save $1.5 billion in annual costs by 2017. Mullen said the job cuts are part of the company’s process of integrating the two businesses and “designing our new organization.”
He continued with a stereotypical business response, “This new structure eliminates duplication to enable faster decision making, increased accountablility and accelerated growth.”
He added that the saving will free up money to invest back into the company’s products. Mullens also said that the affected employees will get a severance. The benefits will last at least six months.
In a memo dated on July 13th, Hees outlined provisional measures. The company cut unnecessary spending by instructing employees to print on both sides of paper and by reusing office supplies like binders and file folders.