Heinz Cuts Employees After Investment Firm Acquisition
Global ketchup manufacturer H.J. Heinz Company recently announced a layoff of 350 employees in the Pittsburgh region. This follows a $28 billion acquisition by investment consortium Berkshire Hathaway and their affiliate 3G Capital.
The company has not yet disclosed how much the layoffs will save them. Pittsburgh Business Times manufacturing reporter Justine Coyne says cutbacks are not unusual during an acquisition, but because of Heinz’s historic connection with the city, many locals are hurting.
“It’s uniquely ingrained into the culture and history of Pittsburgh. People have a romanticized history of Heinz,” Coyne says. The company will continue to keep their world headquarters in the city, but will sublease parts of the Heinz 57 Center and consolidate all employees to their headquarters at One PPG Place.
Coyne sasys the new CEO, Bernando Hees, has a reputation for “cleaning house” during past acquisitions.
“To get a return on their investment, the new owners are going to have to get significant growth or make significant cuts…and they choose to do both,” she says.
The most significant layoffs by Berkshire Hathaway occurred after the takeover of Burger King, where about half of the employees lost their jobs. However, Coynes says the H.J. Heinz Company is much more stable and profitable than Burger King. And while further cuts at Heinz are possible, they will not be as frequent as the cuts that took place at Burger King.