Heinz, the ketchup maker backed by Warren Buffett’s Berkshire Hathaway, has slashed about 7,400 jobs in 20 months as his partners at 3G Capital worked to boost profitability.
Heinz had 24,500 full time employees as of 28 December, the Pittsburgh-based company said Friday in a filing with the US Securities and Exchange Commission. That compares with 31,900 as of 28 April, 2013. Buffett and 3G took the company private in June of that year. Buffett gets $720 million annually from his $8 billion preferred stake in the company, while 3G managers run operations.
“Heinz is run far better under Alex Behring, chairman, and Bernardo Hees, CEO, than would be the case if I were in charge,” Buffett said in his annual letter to Berkshire shareholders last month in which he also praised 3G co-founder Jorge Paulo Lemann. “I knew immediately that this partnership would work well from both a personal and financial standpoint. And it most definitely has.”
3G’s initiatives include the reduction of 4,050 corporate and field positions to save about $250 million a year, and the closing of five factories, eliminating 1,600 positions and reducing annual costs by about $80 million. Both efforts were previously disclosed by the company.
Heinz posted net income of $657 million in the year ended 28 December, compared with profit of about $18 million a year earlier. Lower costs helped cushion a 4.6 per cent sales decline.
Last year, Buffett helped Burger King Worldwide Inc., a 3G- controlled business, buy Canadian doughnut-and-coffee chain Tim Hortons.
Bloomberg News, edited by ESM