It’s not all Dilly bars and Cherry Cokes when Warren Buffett takes over your company,
Bloomberg reports. When the Oracle of Omaha decides you’re ready for Berkshire — at least in Heinz’s case — it’s time for some serious changes.
Earlier this year Buffett teamed up with Brazil’s richest man, Jorge Paulo Lemann, and his private equity firm 3G, to buy Heinz in a $US23 billion deal.
Now it’s time to make the company really sing (and pay down the $US12.6 billion of debt that had be taken on to do the deal). That means cutting costs. All kinds of costs — like 11 senior executives.
An August memo obtained by Bloomberg News outlines new rules. They limit printing to 200 pages a month per employee and restrict colour pages to “customer-facing purposes.” Employees can spend no more than $US15 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 $US45 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.
Not the G-IV, anything but the G-IV.
There are also the 600 job cuts that are expected in the U.S. and Canada, and 250 jobs in peril in the U.K. It looks like, on the east side of the Atlantic, lawyers are particularly concerned (from thelawyer.com):
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.
Still sounds rough.