Dive Brief:
- The Hershey Company is the latest manufacturer to seek cost-cutting measures, translating to the slashing of approximately 300 jobs by 2015's close.
- The candy producer will have pretax charges of about $100 million to $120 million affiliated with the job cuts, and is estimating $65 million to $75 million in savings, the majority in 2016.
- It also is dropping its full-year revenue outlook down to a 2.5% to 3.5% uptick, as opposed to an earlier estimate at 4.5% to 5.5%.
Dive Insight:
Where the job cuts will come from is unclear, though it doesn't involve manufacturing operations. The company has 13,000 employees worldwide. While not a large chunk globally, those 300 could be one of a slew of cuts to come, especially considering the dwindling revenue outlook.
Though it did snag a spot on the Fortune 500, its most recent earnings ($1.09 per share, adjusted for non-recurring gains) and revenue ($1.94 billion) failed to meet analysts' expectations.
The company is also making leadership changes, with CFO Patricia Little now in charge of corporate development and M&A, and Steven Schiller, AEMEA regional president, now the president of China and Asia. It is working on forming a global leadership team targeted at growth in up-and-coming international markets.
This makes sense, considering the sluggish sales in one international market: China's chocolate sales growth did not meet expectations in both April and May. The company placed the blame on an economic slowdown in China that's preventing people from purchasing its products.