OMAHA: ConAgra, the maker of Chef Boyardee, Slim Jim and Hebrew National hot dogs, announced that it is slashing around 1,500 employees and move its headquarters to Chicago from Omaha in Nebraska as part of its major restructuring plan.
The company struggling with a slowing packaged-food industry and a failed acquisition of Ralcorp said that the decision will save it about $200 million in cost savings and much of that will be realized in 2018. This is in addition to about to approximately $150 million in cost cuts over the last two years.
The job cuts represent about 30 percent of the company’s office workforce globally.
“Plant positions will not be eliminated,” the company said in a statement.
ConAgra estimates that it will be spending about $345 million, mostly in cash, over the next two to three years in connection with the restructuring.
“And the move to Chicago, coming in the summer of 2016, will make it easier to attract talent,” the statement quoting CEO Sean Connolly said.
Civic and business leaders in Omaha have admitted that the loss of ConAgra’s headquarters will be a blow to the region. Governor Pete Ricketts and Omaha Mayor Jean Stothert had been in talks with ConAgra about incentive packages to keep the company in the city.
But Connolly said the decision to shift from the Cornhusker State is “not an indictment of Omaha”.
“We’re pleased we’re able to make difficult decisions and yet maintain a major presence in Omaha.”
He said that the company has shifted its focus mainly on its consumer foods business and it made sense to combine all consumer brand employees in one place.
“We’ve got a lot of talented people here in Nebraska (but) we have got to do a better job of growing that business and innovating. Chicago is an environment that offers us access to innovation and brand-building talent.”
ConAgra reported a first-quarter loss of $1.2 billion last month.
The company has been pressured by a major stockholder, Jana Partners, which says ConAgra’s results have been disappointing since it bought Ralcorp for $5 billion two years ago.
ConAgra said in June that it will sell the unit so that it can better focus on improving its own name brands.
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