The closings are part of a downsizing that will shed 2,600 jobs or 14 per cent of the company’s North American factory workforce, Kraft Heinz said Wednesday.
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According to Kraft Heinz, plants in California, Maryland, New York, Pennsylvania, Wisconsin, and Ontario are likely to get closed.
The company plans to have the closure over the next 12 to 24 months. Cheese production will be shifted away from the company’s plant in Champaign, Ill., to other plants in North America, and the company plans to make the Champaign location a “center-of-excellence” in dry sauce production.
Kraft Heinz, which was formed in July by the combination of H.J. Heinz Co. and Kraft Foods Group Inc., is one of the world’s largest food companies, with brands that span supermarket aisles.
“Additionally, Kraft Heinz is announcing that in 2016 we will move Oscar Mayer and our US Meats Business Unit from Madison, Wisconsin to our co-headquarters in Chicago”, Mullen stated. The management also explored extensive alternatives and options before it made the decision to close the plants.
In August, Kraft Heinz had announced the elimination of 2,500 non-factory job including 700 positions at Kraft’s head office in Illinois.
The drastic move to reduce the number of workers and factories are in line with the company’s effort to cut on costs. Michael Mullin also said that process is just beginning though, and company “will keep our employees informed as it progresses”.
Kraft Heinz will have 41 plants and 18,000 employees in North America after the closures. “We were led to believe the St. Marys plant was secure”, said Mayor Al Strathdee in an interview with CBC News. Earlier this year, Oscar Mayer announced it will be cutting about 165 administrative jobs in Madison. The company aims to reduce $1.5 billion in costs by the end of 2017.
This is the first time that Kraft Heinz has reported earnings for the combined company.
WEDC is now working with its partners in the area to see how they can help workers land new jobs, Michels said.
Berkshire Hathaway, the sprawling conglomerate Buffett has overseen for five decades, is poised to report record quarterly profit on Friday because of a $7 billion pretax gain on a stake in Kraft Heinz.
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Plant employees talk on phones and with each other after a meeting was called at Kraft Foods-Oscar Meyer headquarters and plant in Madison, Wis., Wednesday, November 4, 2015.
