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No more free cheese sticks and Jell-O at Kraft after merger with Heinz

The days of free Jell-O and cheese sticks

The days of free Jell-O and cheese sticks are over for employees at Kraft's headquarters. Credit:

The days of free Jell-O and cheese sticks are over for employees at Kraft's headquarters.

After merging this month with Heinz, the combined company rolled out policies aimed at curbing expenses such as travel, electricity and office supplies, according to a memo reviewed by Bloomberg News.

The foodmaker also has begun cutting jobs and even yanked the free snacks, according to people familiar with the matter who asked not to be identified because the decisions are private. Refrigerators once stocked with Kraft treats were removed this month from the headquarters outside Chicago, the people said.

The changes echo an overhaul CEO Bernardo Hees led at Heinz two years ago after Warren Buffett's Berkshire Hathaway Inc. and investment firm 3G Capital took over the ketchup maker. Within weeks of that deal's completion, top executives departed and new managers went to work cutting costs and thousands of employees.

Michael Mullen, a spokesman for Kraft Heinz Co., said Thursday the steps "reflect our drive for increased accountability and efficiency that will enable reinvestment in our people, products and brands."

Heinz issued a similar set of proclamations to employees when 3G took over, setting limits on how many pages they could print per month and outlawing mini-fridges.

The belt-tightening and job cuts helped Heinz produce some of the best margins among large U.S. food companies and created a windfall for Berkshire and 3G, which are banking on a similar result from the combination with Kraft.

Hees has plans to take $1.5 billion of annual costs out of the business by the end of 2017. Toward that goal, he announced a new senior management team last month and the departures of several top Kraft executives. More cuts are underway at junior levels of management, one of the sources said.

Kraft Heinz also said this month it will move its headquarters from the suburbs to a smaller space in a Chicago office tower early next year. The company hasn't said how many of the 1,900 employees at the facility will make the move. It also maintains a headquarters in Pittsburgh, the home of Heinz.

The memo outlined new guidelines that cap spending on meals during travel to $50 a day, except in some higher-priced cities. There are also new limits on hotel rates. Employees were asked to reduce trips, limit their reliance on courier services and save on electricity where possible.

Employees were also told not to bring rival companies' food to work, to show respect for Kraft Heinz products.

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