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Buffett defends buyout firm's 'standard capitalist formula' of layoffs

Billionaire investor Warren Buffett defended private equity partner 3G Capital for its practice of "trying to do business with fewer people."

"3G has come into businesses where they really could do the same level of business with a lot fewer people, and they've made the changes very promptly when it happens," the billionaire investor said Monday on CNBC's "Squawk Box."

"They've been very good about severance pay and all of that, but they have followed the standard capitalist formula, market system formula, of trying to do business with fewer people," Buffett said. "That benefits everybody, particularly benefits the owner, but it's a painful process and sometimes there's a big political reaction to it."

In 2015, Buffett's Berkshire Hathaway worked with Brazilian private equity firm 3G to merge Heinz with Kraft Foods. The combined Kraft Heinz firm then announced plans to close seven factories and cut about 2,600 jobs.

Kraft Heinz shares hit an all-time high in February and are up 6.7 percent over the last 12 months.

Berkshire held its annual shareholders meeting this weekend in Omaha, Nebraska.

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