Hershey Co lays off some workers this week
Hershey Co has laid off a small number of employees, less than 1% of its 20,000 workforce, as part of organizational changes due to rising cocoa prices. The layoffs are part of a broader productivity initiative aimed at saving $200 million by 2026. Despite price hikes on its products, Hershey reported a 17% drop in sales and has cut its annual profit and sales forecast, indicating further price increases may be necessary to manage rising cocoa costs.
By Jessica DiNapoli
NEW YORK, Sept 19 (Reuters) - A spokesperson for Hershey (HSY.N) said on Thursday the chocolate maker laid off a small number of its employees this week as part of organizational changes the company announced earlier this year when cocoa prices reached record highs.
This week’s layoffs, which have not been previously reported, affected less than 1% of the roughly 20,000 employees at the maker of Hershey’s candy bars and Reese’s peanut butter cups, a company spokesperson said told Reuters.
In a statement related to the layoffs, Hershey said it remains focused on transforming its business.
“As part of that transformation, we are making meaningful changes to evolve our capabilities, systems and ways of working to become a leading snacking powerhouse,” the Kisses manufacturer said. Hershey also sells Dot’s pretzels and Pirate’s Booty popcorn.
The Hershey, Pennsylvania-based company announced in February that it would be cutting jobs and incurring costs related to a productivity initiative aimed at generating $300 million in savings by 2026. The initiative also aims to improve supply chain and manufacturing-related spending.
The chocolatier has hiked prices on its candies to offset rising costs over the last several years. Consumers continued to buy its popular treats despite the increases, but sentiment has changed in recent months. In August, Hershey cut its annual profit and sales forecast, and reported a 17% drop in sales.
Hershey has also signaled it would have to hike prices again to offset rising cocoa costs, stemming from a bean disease in Africa.