HERSHEY, Pa. – Hershey Co. (HSY) is cutting 1,500 jobs over three years as part of a plan to scale back production lines and move some manufacturing to Mexico, the candy maker announced Thursday.
When the plan is complete, Hershey's will make its chocolates and other candies at fewer facilities and have a lower overall cost structure. About 80 percent of Hershey's manufacturing will take place in the U.S. and Canada.
Spokesman Kirk Saville said Hershey currently employs more than 13,000 workers, which would mean the cuts will amount to something less than 11.5 percent of its work force.
The maker of Reese's peanut butter cups and Mounds bars reported a 10 percent drop in fourth-quarter earnings last month on lackluster sales. Results lagged due to weak merchandising, the company said, as well as a recall of products made at a plant in Canada last year after salmonella bacteria was discovered.
The company said it will outsource production of low value-added items and also plans to construct a new plan in Monterrey, Mexico to meet growing demand in that country.
"The long-term benefits will include a significant, sustainable increase in investment behind Hershey's iconic brands and new product innovation, as well as targeted, profitable international expansion," said Chief Operating Officer David J. West, in a statement.
Hershey reaffirmed its long-term target for sales growth of 3 percent to 4 percent.
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