Hershey to layoff 15 percent of global employees

Hershey is cutting back on jobs outside of the United States.

On Tuesday, The Hershey Co. announced this week it plans to cut 15 percent of its global workforce. The cuts could affect up to 2,700 workers.

The Pennsylvania-based candy maker has lowered sales expectations largely due to what it called “changes in U.S. shopping habits.”

Hershey published a jargon-laden press release about the layoffs, entitled, “Hershey Details Strategy For Continued Growth.” It read, in part:

"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."

Hershey plans to continue to make investments to grow its core confectionery business and expand its breadth across the snackwheel by capturing new usage occasions and participating in on-trend categories. The "Margin for Growth" multiyear program is designed to improve overall operating profit margin through supply chain optimization, a streamlined operating model and reduced administrative expenses, with savings primarily being achieved in 2018 and 2019. These actions are intended to increase efficiency, leverage global shared services and common processes and increase capacity utilization.

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The move is part of the company’s effort to cut costs by up to $175 million by the end of 2019.

Hershey CEO Michele Buck has said that the company is hoping to take advantage of a trend toward increased snacking in the U.S.

J.P. Morgan analyst Ken Goldman told the Associated Press that many of the job cuts are expected to hit China.

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