Kraft Heinz terminates 2,500 jobs in the U.S. and Canada to save costs

Kraft Heinz is cutting 2,500 jobs in the U.S. and Canada, including 700 of its workforce in Northfield, Illinois in order to cut expenses.

Seven hundred jobs are confirmed by Kraft Heinz spokesman Michael Mullen to be terminated at its headquarter in Northfield, Illinois. The company did not mention in detail other locations where the job cut will take place, but he said none of its factory workers is included. He also assures that the workers affected will be notified and will be paid. The saved cost will be invested back to other Heinz Kraft products.

"We have developed a new streamlined structure for our organization to simplify, strengthen and leverage the company's scale. This new structure eliminates duplication to enable faster decision-making, increased accountability and accelerated growth," Mullen said in an email noted in the Chicago Tribune, explaining it is one of the company's plans in building a new organization.

Workers affected in the area of finance, marketing and sales will receive separation benefits for six months, specified in USA Today.

In March this year, Heinz had merged with Kraft which was facilitated by Warren Buffett's Berkshire Hathaway and 3G Capital. The deal made the food company as the third largest in North America. Under the $46B agreement, Kraft shareholders owned the 49% stake and 51% was on Heinz.

Kraft Heinz Co. has an overall 46,600 workers accommodating 1,900 in its Northfield hub. Bernardo Hees, the Kraft Heinz CEO has foreseen the job cut since Kraft took over Heinz two years ago.

With its target to save over $1.5B yearly expenses by 2017, the management sent some company measures to its employees on July 13. It says they are preventing discretionary expenses instructing employees to reuse office supplies, to use both sides of the paper when printing and to turn off computers after work. The central office in Northfield had also stopped giving out Kraft snacks for free.

The Irish Times reported that ahead of time, 3G had also cut over 7,000 jobs, despite closing five of its factories. They also strictly regulate employees' use of office facilities.

Mergers are damaging for the working class. It is really unwelcoming for those 2500 workers to lose jobs. But as Buffett decisively said, they don't need lots of employees.