When H.J. Heinz Co. was purchased by 3G Capital and Berkshire Hathaway nearly three months ago, questions and rumors began swirling around the industry regarding its future.
Would Heinz remain headquartered in Pittsburgh? Would there be significant layoffs? Would there be a streamlined approach to the business model?
Some of those questions were answered Tuesday, when Heinz announced the elimination of 600 jobs, including 350 in Pittsburgh. The decision by H.J. Heinz Co. to furlough 600 workers will reduce the number of employees at Heinz’ Pittsburgh division to approximately 800, with 6,000 in North America.
“As part of our transition to a private company, the senior leadership team has examined every piece of our business to better position Heinz for accelerated growth in a very competitive global market,” said Michael Mullen, senior vice president of corporate and government affairs. “Unfortunately this process resulted in a number of difficult but necessary organizational changes, including the elimination of 600 office positions across the U.S. and Canada, including 350 in Pittsburgh. We regret the impact this has on Heinz employees and their families.”
Heinz employees were notified Tuesday morning of the layoffs. The news was not totally unexpected, as 3G Capital made significant cuts after acquiring Anheuser-Busch and Burger King. Heinz new CEO, Bernardo Hees, was the former CEO of Burger King and quickly established a new management team at Heinz following the closing of the sale in June. Twelve executives were terminated in the transition to Hees as CEO.
Heinz is also reducing its office space at the Heinz 57 Center on Sixth Avenue. The company currently leases seven floors of space in the former Gimbels building, but will now be only using the sixth floor by the end of 2013. The company will also incorporate an open office work environment at its headquarters at PPG Place with top executives sitting among other workers.
“To foster increased collaboration and faster decision-making, the vast majority of Heinz’ Pittsburgh-based employees will come together as one team in an open office,” Mullen said.
Standard & Poor’s Rating Services has said that 3G estimated it could cut approximately $225 million in Heinz expenses in the next three years. Mullen would not comment on the amount of money Heinz would saved from the layoffs.
H.J. Heinz was founded as a ketchup and horseradish company in Sharpsburg in 1869.