Kraft Heinz eliminates 2,500 salaried jobs

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

Spokesman Michael Mullen said 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.

The company would not specify where other cuts were taking place but said 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 about 46,600 employees before the cuts. That included about 1,900 in Northfield.

The job cuts are not surprising, given the reputation of the company’s management on Wall Street.

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.

Together, the two U.S. food giants own brands that are facing sales challenges amid changing tastes, including Jell-O, Heinz baked beans and Velveeta. 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.

Already, 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.

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