- Conagra Brands is closing the former Pinnacle Foods office in Boulder, Colorado and will be eliminating 100 employees starting in May, according to a notice posted on the Colorado Department of Labor and Employment website. The entire office, once headquarters of Boulder Brands, will be closed by the end of the year and a Conagra spokesman told the Denver Post in an email that employees will receive severance pay.
- After Conagra's $10.9 billion acquisition of Pinnacle last year, the company has been evaluating its offices, brands and resources. The workers at the Boulder office aren't unionized, the Denver Post reported.
- Michael Cummins, vice president of communications at Conagra, told Food Business News that the company used data analysis to evaluate Pinnacle and concluded that the Boulder-based brands needed to be better integrated. "This requires everyone being in the same location so teams can work fast and efficiently, share ideas for innovation in real-time and build our brands with each other," he said. "As a result, the Boulder office location will close by the end of 2019, though many employees will be offered jobs in other Conagra locations."
As Conagra works to integrate Pinnacle, these layoffs shouldn't come as much of a surprise. Since the massive acquisition, Conagra has been shutting down Pinnacle offices and laying off groups of employees to centralize work and cut down on costs.
Pinnacle's shareholders approved the acquisition in October, and since then Conagra has been evaluating and integrating its new business. Conagra announced in December it is closing two of Pinnacle's New Jersey's offices, totaling more than 500 jobs lost. The cuts are coming from Pinnacle's former headquarters in Parsippany and an office in Cherry Hill. Both of these offices will be shuttered by the end of this year.
Conagra said these latest cuts in Boulder will help better integrate the two companies, since operations will be moved to the same plants.
The acquisition was expected to strengthen Conagra's presence in frozen foods and center store by adding well-known brands including Duncan Hines, Birds Eye, Log Cabin, Vlasic and Wish-Bone. Conagra recently overhauled some of its older frozen brands like Healthy Choice and Banquet, since frozen food in general has seen a resurgence. While Pinnacle's brands bring Conagra more opportunity, President and CEO Sean Connolly, said in an earnings call in December that Pinnacle's "innovation and execution came up short," leading the company to results that he described as "highly disappointing."
"We need to bring our executional capabilities to the Pinnacle business now," Connolly said, according to a transcript of the call. "We now have a clear understanding of the source of the weakness in the business, and we’ve started to take action."
Conagra has used layoffs as a cost cutting measure in the past. Well before this deal, the company laid off 140 employees in 2017. In 2015, Conagra moved from its Omaha, Nebraska headquarters, cutting 1,000 jobs there and moving 300 workers to its then-new Chicago headquarters.
Many food and beverage companies have cut food manufacturing jobs as a cost saving measure. TreeHouse Foods, Coca Cola, General Mills, Dean Foods, PepsiCo and Kellogg's RXBAR are among the food giants that have closed offices and cut employees to boost their bottom lines.
But the company is not necessarily just cutting jobs to save money. Connolly told Food Dive at the end of last year that the company would pause on future M&A. Right now, the main focus bringing these two businesses together and continuing to revitalize the frozen foods business.
"For our company, we’re going to be focused on integrating this very well, focused on paying down debt and deleveraging," Connolly said.
This purchase was one of the biggest acquisitions in Conagra's history and made the company the second-largest U.S. frozen foods owner, so it will take significant effort and change to bring Pinnacle under Conagra's roof. Focusing on cost-cutting measures, shrinking offices and pausing on M&A could be a good plan as Conagra pays down debt and makes the acquisition work.