Kraft Heinz Co. will move its Chicago-area headquarters to the
city's center early next year after decades in the suburbs, the
company said on Thursday, in the latest shake-up after it completed
its merger earlier this month.
Kraft Heinz didn't say how the move would affect the roughly
2,000 employees now working at its 700,000 square-foot offices in
Northfield, Ill., about 20 miles outside the city, where Kraft
moved in 1990. The planned downtown office totals 170,000 square
feet over five floors.
Kraft Heinz, which is being run by Brazilian private-equity firm
3G Capital Partners LP, will continue to operate a second
headquarters in Pittsburgh, Pa., Heinz's longtime home, spokesman
Michael Mullen said Thursday. The company now has about 900
employees in Pittsburgh, following multiple rounds of jobs cuts
since 3G took over Heinz two years ago.
3G and Warren Buffett's Berkshire Hathaway Inc., which also
invested in Heinz, agreed in March for Heinz to acquire Kraft. The
deal closed on July 2, creating the No. 5 food-and-beverage company
in the world by sales.
3G is known for radically changing corporate culture at the
companies it oversees—which also include Burger King, now a unit of
Restaurant Brands International Inc.— cutting staff, curbing perks,
and using a stringent method of budgeting to make businesses more
efficient. When the Kraft-Heinz deal was announced, the Brazilian
leadership team said it expected to cut annual costs of the
combined company by $1.5 billion.
Since then, Kraft Heinz has announced a slew of senior
management changes that put 3G-appointed employees in the majority
of the top roles. Industry observers widely expect it to unveil
factory closures or downsizing and more widespread corporate
layoffs in coming months—expectations likely to be reinforced by
the sharply reduced size of the new office space.
The new Kraft office will have an open layout spanning five
floors. The move to downtown will "firmly establish our dynamic new
culture, based on meritocracy, speed, efficiency and
collaboration," Mr. Mullen said in a statement.
Other companies have been moving into Chicago and other urban
spaces, in part to attract younger talent in touch with budding
consumer trends—which is especially important for food companies
like Kraft that have struggled to keep their brands relevant.
Kraft opened a swanky new downtown office in spring 2014, hoping
it would help recruit employees. At the time, executives said the
satellite office would also make meetings easier and improve
commuting for some of its Chicago-area staff, roughly a third of
which lived in or near downtown. Mr. Mullen said that space would
now be subleased.
Moving downtown would be a return to Kraft's roots, where
founder J.L. Kraft first began selling cheese to local merchants in
1903.
Kraft had already sold the real estate at its Northfield
corporate campus in early 2013, after splitting with its global
snacks business now called Mondelez International Inc. At the time,
Kraft said it would lease back the space for a minimum of 10
years.
Write to Annie Gasparro at annie.gasparro@wsj.com
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