Hershey’s to lay off thousands in global workforce reduction
Hershey’s has announced a 15% global job cut to their hourly workforce. According to this Fortune report most layoffs will occur outside the United States.
Hershey plans to trim thousands of jobs from the chocolate maker’s global workforce, a restructuring that comes as many Big Food makers are enacting belt-tightening moves as the industry faces stalling sales.
On Tuesday, Hershey (HSY, +0.45%) said the job cuts would reduce the global workforce by 15% and is driven primarily by cuts to the company’s hourly staff outside of the U.S. Hershey employs roughly 19,000 full-time and 1,650 part-time employees globally. The layoffs are one pillar of the company’s so-called “Margin for Growth” program that is aiming to improve operating profit margins by reducing administrative expenses and improving the company’s supply chain, with savings expected to be seen in 2018 and the year after.
The program will result in pre-tax charges of $375 million to $425 million, a range that includes severance expenses. Cash savings are projected to hit between $150 million to $175 million annually by the end of 2019.
The move by Hershey to cut costs comes at a time when many major food manufacturers, including General Mills (GIS, +0.97%) and Kellogg (K, +0.34%), have been cutting jobs to restructure their operations. While the industry has been busy cutting costs to boost cash flows, the aggressiveness at 3G-backed Kraft Heinz (KHC, +0.41%) has put some pressure on others in the industry to step up their game.