Heinz to Cut 2,700 Jobs, Exit Plants as Profit Drops 19%

H.J. Heinz Co. said Thursday that its fourth-quarter profit fell 19%, and that it planned to slash 2,700 jobs and exit 15 plants in an effort to cut costs and boost profit.

The company, best known for its namesake ketchup, has faced pressure from billionaire investor Nelson Peltz to increase shareholder returns.

Peltz’s Trian Fund Management criticized the restructuring plan Thursday, saying it doesn’t go far enough. Trian last week proposed cutting $575 million in expenses at Heinz and said it would wage a proxy battle for five board seats.

Heinz has called the Trian plan “unrealistic” and said the proposed spending cuts would “cripple” the company. Heinz expects to save $355 million over the next two years through cost reductions. It did not identify the 15 plants it would exit.

Heinz said profit for the quarter ended May 3 declined to $167.9 million, or 50 cents a share, from $206.5 million, or 59 cents, a year earlier. Revenue grew nearly 8% to $2.4 billion.

The earnings were affected by charges linked to asset sales and a write-down of operations in Zimbabwe and gains from the sale of its European Seafood, Tegel poultry and other companies.

Steeper interest costs and a substantially higher quarterly tax rate compared with last year also hurt results, Heinz said.

Heinz shares rose 3 cents to $42.38 after earlier soaring to a new 52-week high of $44.15.

*

Bloomberg News and the Associated Press were used in compiling this report.