Kraft Heinz announced Wednesday that it will move Oscar Mayer and the company’s U.S. meats business from Madison, Wis., to Chicago — a move that will add 250 jobs to Chicago.
The company also announced plans to consolidate its production facilities during the next two years, which will result in the shutdown of seven North American manufacturing facilities: Fullerton, Calif.; San Leandro, Calif.; Federalsburg, Md.; St. Marys, Ontario; Campbell, N.Y.; Lehigh Valley, Pa., and the one in Madison.
The closings will result in the loss of about 2,600 manufacturing jobs at the company, including 700 in Madison. About 50 non-manufacturing positions in Madison also will be cut and not moved to Chicago.
Kraft Heinz also plans to transfer part of its cheese production in Champaign, Ill., to other factories in its network, a move that could mean the loss of some of the 1,400 jobs at the plant, which will still produce sauces and dry goods like mayonnaise, Miracle Whip and pourable salad dressings.
The massive consolidation plan “is a critical step in our plan to eliminate excess capacity and reduce operational redundancies for the new combined company,” Kraft Heinz spokesman Michael Mullen said in a statement.
He added, “We have reached this difficult but necessary decision after thoroughly exploring extensive alternatives and options.”
The announcement reflects a continuation of the cost-cutting and job reductions that began after H.J. Heinz announced plans in March to acquire Kraft Foods Group, creating the third-largest food and beverage company in North America. The company aims to slash $1.5 billion in costs by the end of 2017.
Kraft Heinz reports its third-quarter earnings Thursday.