US confectionery giant The Hershey Company has confirmed it plans to cut around 15% of its global workforce, as it seeks to increase its profitability.
The company, which reportedly employs a total of 18,000 people, is to put in place plans that would see around 2,700 staff lose their jobs.
Its restructuring move is projected to lead to pre-tax charges of between $375 million and $425 million, including costs of around $80 million to $100 million through redundancy payments to staff.
The job losses are expected to be for its workforce based outside of America, with the company having operations in Brazil, Canada, China, UAE, Korea and Mexico.
Despite the US confectionery market coming under pressure from a growth in healthier snacks, Hershey’s said it would continue to invest in its chocolate business – which includes its long-established bars and baking products.
According to the company, it has forecast growth of between 2% and 4% for 2017, with cost savings being planned across the next two years.
"Hershey has tremendous assets – its iconic brands, remarkable people and a history of executional excellence – that position the company well to deliver top- and bottom-line growth," said Michele Buck, incoming president and chief executive officer, The Hershey Company.
"We're making progress against the 'Margin for Growth' related initiatives that should give us the flexibility to invest in certain parts of our business. Our objective is to ensure that we always have the right level of innovation, marketing plans and consumer and customer expertise to drive net sales growth, especially in our North America confectionery and snacks business.
“In addition, we're working to return our international businesses to profitability as soon as possible. Combined, these efforts should enable the company to achieve its adjusted operating profit margin target of about 22% to 23% by year end 2019."
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