Food giant Kraft Heinz Co said on Tuesday that it will axe 2,500 positions in the United States and Canada as the company starts efforts to help it save $1.5 billion until 2017 from the merger completed last month.
Reuters reported that 700 people will be eliminated from its head office in Northfield, Illinois, where it employs 1,900. It added that Kraft Heinz employs 46,000 people, citing a company statement.
The report noted that one of the major shareholders of Kraft Heinz, Brazilian private equity firm 3G Capital is known for aggressively managing costs.
It said that when 3G Capital together with Warren Buffet's Berkshire Hathway Inc bought Heinz' in 2013, the private equity firm cut 7,000 jobs over 18 months and shut down six factories.
Similar cost cutting was expected when Heinz was combined with Kraft last March in a deal valued at $46 billion and created the third largest food company in North America and fifth in the world.
The Brazilian firm had said it would implement the same zero-based budgeting program used to trim costs in other companies it had taken over. Kraft Heinz's CEO is 3G partner Bernardo Hees while Alex Behring, the private equity firm's managing partner is the chairman.
The wire agency said cost cutting measures also include limits on the use of company printers to 200 pages a month.
Citing a spokesman, the Wall Street Journal added that the moves are meant to simplify operations and take advantage of the company's larger scale, citing a spokesman.
"This new structure eliminates duplication to enable faster decision-making, increased accountability and accelerated growth," the paper reported.
Kraft Heinz is expected to have $28 billion in revenues on the strength of such brands as Oscar Mayer, Philadelphia, Velveeta, Maxwell House, Ore-Ida and Jell-O Kraft cheese and Heinz ketchup. Reuters said the company's shares are up by 9 percent since those started trading on July 6, but shares were down 0.8 percent to $77.32 in early trading.
