Hershey to Cut 1,500 Jobs, Build Plant in Mexico
The largest U.S. chocolate maker also said it will build a new, cost-efficient manufacturing plant in Monterrey, Mexico.
The company said it will cut about 1,500 of its more than 13,000 jobs in the overhaul. The amount of production from North America and Canada will drop to about 80% from the current 90% once the manufacturing change is completed, the company said.
The move comes as the maker of Hershey's Kisses and Reese's peanut butter cups has lost market share in the U.S. to Mars. Hershey has been trying to increase sales by focusing on its core brands, while developing new lines like premium dark chocolate.
Hershey also said it still expects sales to increase by 3% to 4% in 2007, with earnings from operations up 7% to 9%. The earnings forecast is below the company's long-term goal of 9% to 11%, but in line with the company's previous forecast.