Food and Beverage Business
Finance

Hershey announces layoffs as it accelerates automation efforts

Hershey announces layoffs as it accelerates automation efforts Hershey Food and Beverage Business

The US-based confectionery giant Hershey has unveiled a new restructuring plan aimed at streamlining its operations to drive productivity through automating processes. The company has stated that the reorganization includes reducing its workforce by an undisclosed amount – “less than 5% of its workforce.” The rationale behind this strategic move is to cut costs related to supply chain and manufacturing, optimize expenses, and leverage new technology and business models to automate processes and generate long-term savings.

The restructuring plan is expected to generate $300m in on-going annual savings over the next two years. However, the company anticipates severance expenses between $45m and $60m as a result of the redundancies. Last year, Hershey announced the closure of a US facility that produces Dot’s Homestyle Pretzels as part of its efforts to improve efficiency within its pretzel brand.

Despite a challenging environment and a dip in net income, Hershey’s CEO, Michele Buck is optimistic about the brand’s future. Buck stated, “We are elevating our focus on productivity and transformation to strengthen our business and deliver peer leading performance over the long term,” adding that the company expects 2% to 3% net sales growth in 2024. Hershey’s strategic response to consumer needs and market dynamics positions it well to navigate future challenges within the food and beverage industry.

In light of these developments, companies operating in the food and drink sector should closely monitor industry trends and consumer behavior to capitalize on growth opportunities. By employing advanced technology and optimized processes, food and beverage businesses can enhance their capabilities and meet ever-evolving consumer needs. It is crucial for industry players to adapt to changing market dynamics, drive automation throughout their operations, and seek long-term cost efficiencies.