Michele Buck, The Hershey Co.’s new president and ceo, today announced a “Margin for Growth” strategy that will cut the company’s global workforce by 15 percent, primarily among hourly employees outside of the United States.
The move is estimated to cost between $375 million and $425 million in pre-tax charges, including one-time employee separation benefits of $80 million to $100 million. Cash savings are expected to reach an annual run-rate between $150 million and $175 million by the end of 2019.
Buck says the goal is to achieve an adjusted operating profit margin target of 22-23 percent over the next three years. The company expects annual constant currency net sales growth of 2-4 percent, driven primarily by its North America business.
“We’re making progress against the 'Margin for Growth' related initiatives that should give us the flexibility to invest in certain parts of our business.” she says. “Our objective is to ensure that we always have the right level of innovation, marketing plans and consumer and customer expertise to drive net sales growth, especially in our North America confectionery and snacks business. In addition, we’re working to return our international businesses to profitability as soon as possible.”
Buck, who officially began her role today, also announced eight executive team members who will join her at the helm of the Hershey, Pa.-based confectionery and snack giant. She says she’s “extremely confident” in the individuals who will help lead the company as it continues to innovate and strives to “deliver leading sales growth and margins across the food industry.”
“This is a great team, with a range of experiences, expertise and backgrounds to accelerate our innovation, execute with excellence, instill a commercial mindset in all we do, and inspire our remarkable employees to achieve our goals,” Buck says.
Todd Tillemans, will join Hershey on April 3 as president of the company’s United States business, including core confection, its expanding portfolio across snacking and its sales and go-to-market teams.
Tillemans joins the company from Unilever, where he worked for more than 23 years. He has held multiple leadership positions, including leading Unilever’s skin care business in Europe and Russia, its personal care business in the United States, and most recently, serving as president, customer development U.S.
Steven Schiller, who currently works as president of Hershey’s China and Asia division, will now serve as president, international. He will continue to oversee the China and Asia markets and will assume responsibility for the Americas region, India, Europe, the Middle East and Africa.
Terry O’Day, currently chief supply chain officer, has been named senior v.p. and chief product supply and technology officer. She will continue to oversee the company's supply chain organization and will assume responsibility for Hershey’s productivity, information technology and enterprise connectivity initiatives.
Four executives will continue in their roles. They include:
- Patricia Little, senior v.p., cfo
- Leslie Turner, senior v.p., general counsel, secretary
- Kevin Walling, senior v.p., chief human resources officer
- Mike Wege, senior v.p., chief administrative officer
Hershey has begun a search for a chief growth officer who will lead Hershey’s insights and analytics; strategy; marketing excellence functions; innovation; research and development; mergers and acquisitions; and The Hershey Experience. The company has identified an external candidate who is expected to join the team this spring.
In connection with these announcements, Chief Knowledge and Technology Officer Waheed Zaman will retire from the company, effective March 31.
“These appointments reaffirm our commitment to creating opportunities for remarkable people to grow within the company and to attracting world-class talent from outside of Hershey,” Buck says. “On behalf of the Board of Directors and management, I would like to thank Waheed Zaman for his work over the past four years to advance our technology, data and analytics capabilities.”