Kraft Heinz today cut about 200 salaried workers across the U.S. and Canada as part of its continued business unit consolidation, dismissals that included white-collar workers at its headquarters in Chicago and Pittsburgh.
Company spokesman Michael Mullen said the layoffs affected less than 1 percent of the company's workforce and will help Kraft Heinz "reinvest in our brands and our business in ways that benefit our consumers."
The mass firing comes about a month after the packaged-foods company pulled its $143 billion bid to buy Anglo-Dutch consumer-products company Unilever after its target rebuffed its offer and its approach became public. Kraft Heinz said it didn't want to engage in a hostile takeover battle.
The job cuts and reorganization also come on the heels on the company's announcement that it planned to slash an additional $200 million in annual expenses, on top of the $1.5 billion Kraft Heinz targeted after Heinz merged with Kraft in 2015.
Since that merger, orchestrated by Brazilian private-equity firm 3G Capital and Warren Buffett's Berkshire Hathaway, the company has shuttered factories and fired thousands of workers in order to reduce expenses and boost margins.
The company's best-in-class operating margin was 23 percent in the fourth quarter, up from 18 percent a year earlier. Revenue fell 3.7 percent to $6.85 billion.
Struggling to grow sales of its old-line staples such as Heinz ketchup and Kraft cheese, the company turned its attention to acquisitions, submitting an unsolicited bid for Unilever. But there was pushback from the start, according to Bloomberg. A major point of concern of a potential Kraft Heinz takeover of Unilever, particularly in Europe, was whether its focus on "brands with purpose" would survive the relentless cost cutting that is the hallmark of 3G, the publication reported.
After the deal fell apart, Kraft Heinz said it is investing $200 million in an expanded corporate social responsibility program that includes a pledge to donate 1 billion meals to people in need by 2021, improve the sustainability of its supply chain and reduce its greenhouse gas emissions by 15 percent.
Kraft Heinz CEO Bernardo Hees told Bloomberg the additional cost cuts made investing in the sustainability program possible.
Employees who were fired were offered "substantial severance packages" and outplacement services, Mullen said.