Dive Brief:
- In a move the industry has anticipated, The Kraft Heinz Co. is eliminating approximately 2,500 jobs — of the combined groups' 46,600 — following the merger between Kraft Foods Group and The H.J. Heinz Company.
- Approximately 700 of the jobs are at Kraft's headquarters in Northfield, IL — that's about 35% of the about 2,000 people working there.
- The industry saw this coming, considering 3G Capital, which worked with Warren Buffett's Berkshire Hathaway to form this company, has a history of cost cuts, including those at Heinz.
Dive Insight:
Bloomberg reported job cuts at Kraft late last month, in addition to no longer providing an employee perk: free snacks.
The signs have been telling: Kraft executives were replaced before the merger's completion, but most revealing was moving the headquarters to a significantly smaller space, from 700,000 square feet in Northfield to 170,000 square feet in Chicago's city center.
In light of 3G's history, cost-cutting tactics are far from over.
Meanwhile, individual earnings for each company announced Monday after market close suggest potential challenges for the merged company, not to mention foreboding brand shedding, according to Kelly O’Keefe, a branding expert and professor at Virginia Commonwealth University.
Also, says Buffett, a Mondelez acquisition — or that of another large food company — is not likely right now.