Battered with plummeting sales, accounting woes, and dropping valuations, American packaging behemoth Kraft Heinz has some bad news for the company: 400 workers are expected to lose their jobs this year as part of its massive retrenchment program.
As of the first three months of this year, 100 personnel had been rendered unemployed. The shakedown had cost Kraft Heinz more than $27 million in operating expenses for the first quarter, which includes $1 million in severance pay and benefits in addition to $2 million in exit costs.
Kraft Heinz ended the contracts of 200 more workers by June 30, based on a second-quarter report released late Tuesday by the Securities and Exchange Commission (SEC). The massive cut in the workforce and plant shutdowns will affect 1,800 hourly-jobs worldwide.
Last year, the company gave the pink slip to 1,400 workers, with most terminations being carried out in Asia, Canada, and Europe as well as other facilities outside the United States, Kraft Heinz disclosed on Tuesday.
In an emailed statement, company spokesperson Michael Mullin said that Kraft Heinz understands the effect of the layoffs. "As always, the company is committed to making sure its workers are treated with utmost respect and dignity," Mullin said.
Kraft Heinz restated its financial statements dating back three years ago and announced billions of dollars in impairment charges. The company's shares have dropped 57% in the last 12 months. The restructuring is not seen to include its Chicago operations, sources with knowledge of the matter, said.
Some 38,000 employees have worked for Kraft Heinz as of last quarter of 2018. In February, the company reduced in status $15.5 billion worth of its Oscar Mayer processed-goods unit in the midst of falling sales. In that same month, the company revealed that the SEC was conducting a probe into irregularities connected to pricing deals with Heinz suppliers.
In the first weeks of August, Heinz profits crashed under $30 when the company posted sluggish earnings in the second quarter. In the last few weeks, it has not recouped its losses and just before the closing bell Tuesday, stocks fell 1% at $26.04.
The Kraft Heinz Company is an American food company formed by the merger of Kraft Foods and Heinz based in Chicago, Illinois. Kraft Heinz is the third-largest food and beverage company in North America and the fifth-largest in the world with $26.2 billion in annual sales as of 2018.
