The parent company of Madison-based Oscar Mayer is cutting 2,500 jobs in the United States and Canada, with at least 165 of those coming from Madison’s corporate offices.
The corporate-wide layoffs were announced Wednesday morning by the newly formed Kraft Heinz Company, according to the Associated Press. Ald. Larry Palm, who represents the north-side district where Oscar Mayer is located, later reported that the city was notified the company will shed 165 jobs here.
“This is a tough day for all [of] us, my thoughts are with the employees of Oscar Mayer,” Palm wrote. “Oscar Mayer is a cherished, multigenerational company that has been in Madison over 100 years. I know this will impact our Northside community and the City will work as best as we can to make sure that those who are affected have the support necessary to find new success here.”
Madison’s Oscar Mayer facility includes both corporate headquarters and meat-processing. Its spokesperson did not respond to requests for comment.
On Tuesday, as rumors of pending layoffs spread, a union official speculated that Madison cuts would likely be in the corporate offices. “I’ve got friends over there in the corporate area, in management,” said Doug Leikness, president of United Food and Commercial Workers Union Local 538. “There are a couple here and there who have told me that their day is coming.”
As Isthmus reported on June 25, there is cause for concern that corporate headquarters may be shifted elsewhere.
The Kraft Heinz Company announced its second quarter earnings Monday. Kraft’s net revenues had dropped by 4.9% and Heinz’ results were mixed. According to the official statement, “the Heinz brand and business will remain headquartered in Pittsburgh and the Kraft brand and business will remain headquartered in the Chicago area.”
This morning’s announcement indicated that around 700 of the layoffs will occur at Kraft headquarters. Kraft Heinz employs a total of 46,600.
The earnings report stressed that the new company expects it will “generate aggressive, run-rate cost savings of $1.5 billion by the end of 2017, inclusive of savings from productivity and cost savings initiatives contemplated prior to the merger.”
According to the Associated Press, other cost-cutting measures were announced in a July 13 memo to Kraft Heinz employees. Included among the “provisional measures” were requests to print on both sides of paper and reuse office supplies such as binders and file folders.
Peak Oscar Mayer employment in Madison was 4,000 in the 1970s. Today, it is 1,200.
Oscar Mayer was merged with Kraft in 1988 by Philip Morris Companies, which owned both at the time. Kraft was spun off as an independent company in 2007.
The current president of Oscar Mayer, Mark Magnesen, is known within the industry for his cost-cutting prowess. He was named president in early March. He continues to also serve as executive vice president at Kraft.
