Bloomberg reports that it’s not all fun and games when Warren Buffett happens to take over your company. If the Oracle of Omaha believes that you belong as part of the Berkshire Hathaway brand – at least in the case of Heinz – some serious changes are on the horizon.
Earlier in the year, Warren Buffett and Berkshire Hathaway decided to team up with 3G Capital and Jorge Paulo Lemann, the richest man in Brazil, in an effort to buy Heinz Co. for a total of $23 billion.
Now they are in the phase of restructuring the company to make it more profitable (and also begin to pay down the $12.6 billion worth of debt that they took on during the deal). These efforts mean that they must cut costs. They are going to cut all kinds of costs, even 11 of the company’s senior executives.
Bloomberg tells us:
An August memo obtained by Bloomberg News outlines new rules. They limit printing to 200 pages a month per employee and restrict color pages to “customer-facing purposes.” Employees can spend no more than $15 a month on office supplies and are expected to reuse items such as box files. To save on electricity, mini-refrigerators “are not permitted moving forward” and staff should rely on appliances in common areas.
Employee spending on business trips was limited to $45 per day for food and incidentals, two of the people said. The aviation department, which included two leased aircraft and a company-owned Gulfstream IV, was shut, according to one.
The company is also expected to make 600 job cuts in Canada and the United States. They will cut an additional 250 jobs in Ireland and the UK. On the eastern side of the Atlantic, company lawyers are particularly concerned.
Thelawyer.com tells us:
In a statement Heinz said: “After a comprehensive evaluation process, the company has developed a proposed new streamlined structure for Heinz UK & Ireland.
“Unfortunately, the proposals may result in a number of difficult organizational changes, including the elimination of 248 office positions across the UK and Ireland. We regret the impact this may have on Heinz employees and their families.
“The proposal is subject to a consultation process with employees and their representatives, and Heinz is committed to ensuring all employees are treated with the utmost respect and compassion.
This is not exactly a walk in the park.