US ketchup maker Heinz to axe 600 jobs in North America

14 Aug 2013

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The world's largest ketchup maker HJ Heinz Co said yesterday that it will eliminate 600 positions in the US and Canada as part of the company's drive to reduce costs under its new ownership.

More than half the reduction, or about 350 positions, will be in Pittsburg, where Heinz is based, according to company spokesman and senior vice president Michael Mullen.

The announced job cuts represent around 9 per cent of the company's total workforce in North America.

''Our new organisational structure will simplify, strengthen and leverage the company's global scale, while enabling faster decision making, increased accountability, and accelerated growth,'' Mullen said.

Heinz is one of the world's leading producers and marketers of food products specialising in ketchup, sauces, meals, soups, snacks and infant nutrition. Currently, it has about 6,600 employees in North America and 32,000 worldwide.

The company was taken over earlier this year by billionaire investor Warren Buffet's holding company Berkshire Hathaway Inc and Brazil's richest man Jorge Paulo Lemann's investment firm 3G Capital in a $23-billion deal. (See: Warren Buffett, 3G Capital to buy HJ Heinz Co for $23 bn)

Berkshire and 3G Capital invested about $4 billion each in common equity of Heinz holding company. Besides, Berkshire committed additional $8 billion to buy preferred stock of the company.

Just a fortnight after the completion of the acquisition in June, Heinz announced a senior management shakeup that saw the departure of 11 top executives of the company.

Its chief executive officer Bernardo Hees, the former chief executive of fast food chain Burger King which was acquired by 3G Capital in 2010, had resorted to similar job cuts as part the food chain's restructuring.

In the first two months after the takeover of Burger King, 3G Capital cut over 400 jobs and said that it would curtail spending on travel, rent and other items to save $30-40 million annually.

It is expected that Hees will change the look of Heinz headquarters, as he had done for Burger King by bringing together most of the staff ''in an open office environment.''

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