HERSHEY, Pa. -- The Hershey Co. has announced the implementation of a new productivity initiative that includes changes to the global leadership team, as well as layoffs.
The company has identified opportunities to simplify its structure and improve ways of working in order to unlock growth potential in its core confection and emerging snacks businesses. These efforts are intended to ensure Hershey’s ability to rapidly anticipate and respond to the changing demands of the global consumer, it said.
Hershey earlier this year said it is transitioning its product portfolio to simple and easy-to-understand ingredients.
The productivity program is expected to result in the reduction of approximately 300 jobs by the end of 2015, with estimated pre-tax charges and costs of $100 million to $120 million in 2015. As part of the streamlining of the organization, the company said it will first offer a voluntary separation program and is committed to assisting all affected employees during the transition. The layoffs do not affect manufacturing because the company attained efficiencies through previous productivity programs, it said.
Hershey also has announced changes--effective immediately--to its global leadership team to better deliver the company’s strategy, support its core business and position Hershey to capitalize on adjacent and international growth opportunities.
Patricia Little, senior vice president and CFO, will now also be responsible for corporate development, mergers and acquisitions. M&A will continue to be an important driver of Hershey’s future success.
The company also has created new roles focused on China, its No. 1 international growth priority, and on growth and expansion in emerging international markets including India, Latin and South America, the Middle East, Europe and Africa.
“We have taken a fresh look at how our resources and people are deployed globally and are better aligning our structure to the company’s long-term strategies and goals,” said John P. Bilbrey, chairman, president and CEO of The Hershey Co. “This initiative is designed to unlock greater value across the organization by empowering decision-making closer to our customers and consumers, enabling a more enterprise-wide approach to innovation, swiftly advancing our knowledge agenda and ensuring we effectively allocate resources to future growth areas. Removing cost and complexity from our business will make us more flexible to quickly react to changing consumer and competitive marketplace trends.”
The company expects the program to generate pretax savings of $65 million to $75 million, primarily in 2016, of which a portion will be reinvested back into the company. Hershey anticipates that enabling further investment in brand-building and global capabilities should deliver confectionery and snacks revenue and earnings growth.
The Hershey Co., based in Hershey, Pa., is a global confectionery leader, maker of chocolate, sweets, mints and other snacks. The company, which has more than 80 brands around the world that drive more than $7.4 billion in annual revenues, includes such iconic brand names as Hershey's, Reese's, Hershey's Kisses, Jolly Rancher, Ice Breakers and Brookside.
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