The biggest cuts came in staffing. In August 2015, about a month after the deal closed, Kraft Heinz laid off 2,500 employees, roughly 5 percent of its global work force. That included around 700 people, or about a third of the staff, at Kraft’s headquarters in Northfield, Ill. In November, Kraft Heinz announced plans to shut down seven plants in the United States and Canada, cutting 2,600 more jobs.
From London to Chicago, important responsibilities once divided among multiple employees, like market analysis and negotiations with supermarkets, fell to a single individual or a small group. With each round of layoffs, those who remained became increasingly dispirited, according to former employees. In London, talk of growing discontent at the Kraft Heinz office made it difficult to hire, said a former high-ranking official at that branch, who spoke on the condition of anonymity to discuss internal matters.
Kraft personnel, including some with decades of experience, were replaced by 3G leaders, some of whom had virtually no experience in the consumer packaged goods industry, said Robert Moskow, an analyst at Credit-Suisse who tracks Kraft Heinz.
“In other 3G companies, that strategy injected new energy and a new way of thinking and a way to get rid of sacred cows,” he said. “But it’s a very risky strategy.”
For the first year or so, it appeared the strategy was paying off. Kraft Heinz’s stock price climbed, and in early 2017 it offered to buy the European conglomerate Unilever for $143 billion. After being rebuffed, Kraft Heinz withdrew the offer a few days later.
Problems soon began to emerge. Sales started softening, and while 3G’s cost-cutting efforts resulted in robust profit margins, the stock dropped as investors got nervous.
This year, Kraft Heinz acknowledged that its problems ran deep. The company disclosed it had received a subpoena from the Securities and Exchange Commission related to an investigation of its accounting. And in February, the company took the $15.4 billion write-down, signaling that its beloved brands were less valuable than when it acquired them four years ago.
