Kraft Heinz announced today it will close seven manufacturing plants in the United States and Canad, lay off about 2,600 workers and move its Oscar Mayer meats business to Chicago from Madison, Wisc.
The plants that will close in the next 12 to 24 months include facilities in Madison; Fullerton, Calif.; San Leandro, Calif.; Federalsburg, Md.; St. Marys, Ontario; Campbell, N.Y.; and Allentown, Pa. Production will shift to other North American locations, Kraft Heinz said.
Kraft Heinz was formed in a merger that closed in July. The company is trying to slash $1.5 billion in costs by 2017. This round of layoffs will trim about 6% of the company's workforce.
"Our decision to consolidate manufacturing across the Kraft Heinz North American network is a critical step in our plan to eliminate excess capacity and reduce operational redundancies for the new combined company," said Michael Mullen, a senior vice president at the company. "This will make Kraft Heinz more globally competitive and accelerate the company's future growth."
The job cuts come on top of 2,500 positions eliminated in August. The food giant is controlled by the Brazilian investment firm 3G Capital, which is known for cutting costs.
Mullen said Kraft Heinz would also replace a facility in Davenport, Iowa with a newly-built plant and upgrade a facility in Champaign, Ill., into a "center-of-excellence" in dry and sauce production.
Copyright Agence France-Presse, 2015