Hershey’s “Margin for Growth” program includes laying off thousands of workers in an attempt to improve profit and reduce expenses. Savings are expected to be seen in 2019.
According to a news article published by Fortune, the chocolate manufacturing company is cutting thousands of jobs globally. Fortune adds that Hershey’s part-time and full-time employees currently number at around 1,650 and 19,000 respectively.
The announcement was made last Tuesday, February 28. Hershey’s press release includes the information that the decision to reduce its number of employees would cause a fall of 15 percent in the firm’s global workforce.
Fortune writes that this decision is part of the program entitled “Margin for Growth.” The program aims to improve the operating profit margins by cutting administrative expenses and improving the supply chain.
Hershey’s is not the first big food manufacturer to announce its plans for layoffs. According to Fortune, Kellogg and General Mills are also attempting to restructure their operations through similar means.
In Hershey’s press release, it stated that the “Margin for Growth” program is expected to result in pre-tax charges of $375 million to $425 million, as well as one-time employee separation benefits of $80 million to $100 million. Cash savings are reportedly going to reach $175 million by the year end of 2019.
Incoming Hershey’s CEO, Michele Buck, also said that the initiatives the company is taking would give the firm the flexibility it needed to invest in parts of the business. It aims to meet and ensure the right level of innovation, plans, and expertise regarding marketing and consumer-related areas in order to raise the growth of net sales.
The news website adds that this is all a response to the slowdown being experienced by food groups in the market. As more and more customers are moving towards the direction of healthy foods, the pressure for big brands to keep a steady footing in the market increases.