Berkshire Hathaway and 3G capital took control of Kraft foods and Heinz ketchup not long ago, where efforts first focused on Heinz.
After replacing most of the top-level management (and many of the juniors), Heinz also shaved thousands of jobs in an effort to cut costs. The efforts seem to have worked; it boasted some of the best margins in the food industry after the cuts were implemented.
Hathaway and 3G are now turning their sights on Kraft, and hoping many of the same policies will work. In addition to job cuts and management replacement, they will be moving the corporate headquarters from the Suburbs to downtown Chicago, placing strict limits on travel and food expenses, and even removing free snack refridgerators from staff break rooms. Employees will also no longer be allowed to bring competetor products to the office for lunch, as it “voliates the respect for the food we make”, among other restrictions.
Only time will tell if the belt-tightening will pay off!
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