Kraft Heinz To Shed 2600 Factory Jobs

Food company Kraft Heinz Co. announced the layoffs of 2,600 employees and the closing of seven plants in an effort to increase the profitability at the mammoth food-beverage company.

According to the company, it will close its factories located in Fullerton, California; San Leandro, California; Federalsburg, Maryland; St. Marys, Ontario, Canada; Campbell, New York; Lehigh Valley, Pennsylvania; and Madison, Wisconsin. The company plans to close that facility and build a new $203 million dollar state-of-the-art manufacturing center at the Eastern Iowa Industrial Center in northwest Davenport.

The Iowa Economic Development Authority (IEDA) board today approved state incentives to the Kraft Heinz Foods Company to keep the production of Oscar Mayer products in Davenport. After the facilities close, Kraft Heinz will have 41 plants in North America that employ about 18,000 people.

Strathdee noted that the plant was started by Richardson Foods, and then later acquired by multinational Unifine, and eventually Heinz in 2004.

Heinz and Kraft merged this summer and company officials promptly began cost-cutting measures that mirrored Heinz’s 2013 acquisition by Berkshire Hathaway and 3G Capital. The new plant is expected to retain at least 475 of the 1,200 existing jobs.

In the quarter ended September 27, Kraft Heinz said profit shrank to $12 million from $608 million a year earlier on a pro forma basis that consolidates results as if the companies had been combined in both periods.

The decision to cut the additional jobs and shut six factories in the USA and one in Canada came after an “extensive review” of Kraft Heinz’s North American supply chain and capacity use, Mullen said on Wednesday. “They approved tax benefits with a maximum value of 1.75 million to support the $163 million capital investment that Kraft Heinz is proposing to make”, Hoffman says. “We do have manufacturers in Madison and Dane County who are right now looking for skilled workers”, Soglin said.

As for the would-be displaced workers, the management of the company assured that they would be properly compensated with severance pay.

Doug Leikness is president of the employee union at the Oscar Mayer plant in Wisconsin, which is one of the facilities slated to be closed.

Reuters adds that investors and analysts were expecting the job cuts at the company following the announcement of the $46 billion merger in March.