US-based confectionery giant Hershey has announced a restructuring plan that includes reducing its workforce to drive productivity by automating processes.

The Reese’s brand owner has not said how many jobs will be lost. It told Just Food in a statement that the lay-offs will “impact […] less than 5% of [its] workforce”.

According to the food giant, the rationale for the move, announced yesterday (8 February), aalongside its Q4 and full-year 2023 results, is to decrease costs related to supply chain and manufacturing, optimise expenses and leverage new technology and business models to automate processes and generate long-term savings.

Hershey said that it “does not expect significant disruption […] to [its] employee base,” from the move.

“We are focused on leveraging investments we are making in technology to drive automation and the scale across multiple categories – confection, salty snacks”, the chocolate producer said.

“Examples of this would be driving greater efficiencies and connectivity through shared services, enabling better forecasting and responding to changes in the marketplace more quickly to better meet consumer needs.”

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By GlobalData

The two-year plan ending in 2026 is expected to generate $300m in “on-going annual savings”.

Hershey said the redundancies will result in severance expenses between $45m and $60m.

Last August, Hershey said it was set to shut down a US facility that produces Dot’s Homestyle Pretzels.

The US confectionery major announced its factory in Velva in North Dakota will no longer be operational as the company aims to improve efficiency for its pretzel brand.

Hershey saw its Q4, 2023, net sales increase by 0.2% year-on-year to $2.65bn but its net income of $349m was down 11.5%

Michele Buck, Hershey’s CEO, said: “We continue to operate in a dynamic environment but we are encouraged by the resilience of seasonal traditions and the consumer response to innovation within our categories.

“While historic cocoa prices are expected to limit earnings growth this year, we believe our strong marketing plans, innovation and brand investments will drive top-line growth and meet consumers’ evolving needs. We are elevating our focus on productivity and transformation to strengthen our business and deliver peer leading performance over the long term.”

Hershey said it expects 2% to 3% net sales gowth in 2024.