Newly merged Kraft Heinz eliminating jobs; effect on Dover not known yet

NEW YORK — Kraft Heinz says it is cutting about 2,500 jobs as part of its plan to slash costs after the food companies combined.

Spokesman Michael Mullen says affected workers are in the U.S. and Canada and were to be notified in person. About 700 of the cuts were coming in Northfield, Illinois, where Kraft had been headquartered.

Contacted Wednesday, Mr. Mullen would not say whether any employees at the Dover plant would be affected.

Kraft Heinz announced Wednesday it is cutting 2,500 jobs company wide, but would not specify where the cuts would be made other than they would be salaried employees. Contacted Wednesday, a spokesman would not verify if employees would be laid off at the Dover facility on West North Street. (Delaware State News file)

Kraft Heinz announced Wednesday it is cutting 2,500 jobs company wide, but would not specify where the cuts would be made other than they would be salaried employees. Contacted Wednesday, a spokesman would not verify if employees would be laid off at the Dover facility on West North Street. (Delaware State News file)

Kraft employees about 550 at its Dover plant at 1250 W. North St., according to a release in September.

Brands produced there include JELL-O Gelatin & Pudding, Sure Jell, Baker’s Coconut, Know, Stove Top, Kool-Aid, Country Time, Crystal Light, Shake ‘n Bake, according to a site profile at kraftcareers.com.

“We have developed a new, streamlined structure for our organization to simplify, strengthen and leverage the company’s scale,” Mr. Mullen said in an email. He added that it would eliminate duplication and accelerate decision-making.

Kraft Heinz would not specify where other cuts were taking place but said that all the jobs were salaried. It said none of the job cuts involved factory workers.

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 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.

Mr. Hees has 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.

Together, the two U.S. food giants own brands including Jell-O, Heinz baked beans and Velveeta that are facing sales challenges amid changing tastes. Their combination was nevertheless seen as attractive because of the opportunity to combine functions like manufacturing and distribution.

Executives say they expect to save $1.5 billion in annual costs by 2017.

Affected employees, who worked in jobs such as sales, marketing and finance, will be given severance benefits of at least six months, Mr. Mullen said.

“We are committed to treating all impacted individuals with the utmost respect and dignity throughout this process,” he said in the email to The Delaware State News.

In September 2014 Kraft celebrated 50 years in Delaware, getting its start when General Foods selected Dover as the site for a new plant that at the time of the 1963 announcement was the company’s largest capital investment.

When it went into operation in 1964, the Dover plant was General Food’s largest in terms of products produced. Those products included Jell-O gelatin and pudding mixes, Log Cabin syrup and Baker’s chocolate products. It planned on employing 1,300 people.

The chocolate division was moved to Canada in 1992.

General Foods consolidated with Kraft in 1995.

Kraft Heinz had been belt-tightening in recent weeks.

In a memo to employees dated July 13, Mr. 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.

Reach the Delaware State News newsroom at newsroom@newszap.com

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