The company that makes popular snacks like Reese’s, Dot’s Pretzels, and Kisses recently announced a big plan to restructure that will mean letting go of about 200 workers, or 1% of its 20,000-person workforce. It might look like a loss, but the company is also adding new jobs, mostly in technology and data science, to fit its plan for future growth.
The move by Hershey’s is part of a larger plan to improve operations and become a major player in the snack business.We need to examine what’s happening and what it means for the business, its workers, and its customers.
Why Hershey Is Changing Things
Hershey’s decision to lay off some employees and invest in technology and data science is a smart way to keep up with the constantly changing market. In the past few years, the company has had problems, such as rising costs for key products like cocoa, problems with the supply chain, and changes in customer behavior.
To improve its chances of future success, Hershey is working to change how it makes things and does business. The company wants to become more efficient and save money by investing in new technologies, automating more tasks, and simplifying its operations.
Hershey said in a statement that the change will help it improve its “capabilities, systems, and ways of working” to remain a “Leading Snacking Powerhouse.” In the long run, the company wants to streamline its supply chain, lower costs and put money back into areas that will help it grow.
How Do Job Cuts And New Jobs Affect Things?
Concerns are often raised when jobs are cut, but Hershey’s has only let go of 1% of its staff. The 200 workers who will be let go are part of a larger plan to move resources to parts of the business with more room to grow. This means creating dozens of new jobs in fields like data science and technology, which are becoming increasingly important for the company’s digital transformation.
Hershey hinted at these layoffs earlier this year when it said it wanted to cut costs and make the most of its employees. In February, the company said it would have to pay up to $60 million in retirement costs for fired employees. But the goal was clear: the company had to get smaller, more efficient, and better prepared to deal with the changes in the food business.
Changes To A “Leading Snacking Powerhouse”
Hershey’s long-term goal is to become a more organized and tech-savvy business. New technologies, robotics, and decision-making processes based on data are at the heart of this change. Undoubtedly, the company wants to do more than just cut costs. They also want to set themselves up for long-term success using modern business strategies.
The company’s efforts to ease and automate different processes are part of a larger trend of companies using technology to cut costs and make their processes more efficient. Hershey wants to improve its supply chain, production methods, and ability to serve customers more personalized and effectively by using data science and technology.
This change is also projected to save the company $300 million, which will be put back into its growth in the future.
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Costs Going Up And How People Act
Rising cocoa prices are a big reason Hershey has been having trouble lately. Cocoa is an important ingredient in many of its goods. Like many other food and drink companies, Hershey has had to raise its prices to cover these higher costs. Consumers short on cash have had to cut back on spending, which has hurt the company’s sales.
In its earnings report for the second quarter, Hershey said its net sales were $2.1 billion, 17% less than the same time last year. Because of this, the company had to change its sales and profit predictions for the rest of 2024, now expecting worse results than it had first thought.
What The Future Holds For Hershey
Even though there are problems, Hershey is still hopeful about the future. The business thinks that by investing in technology, automation, and data science, it can overcome its current problems and improve in the long run.
The plan for Hershey’s isn’t just to cut jobs and keep costs down; it’s to completely change how the business works. Hershey wants to better meet the needs of today’s customers, who want more ease, healthy options, and more personalized shopping experiences. To do this, the company is becoming more flexible and tech-focused.
Additionally, the business knows that snacking’s future is changing quickly, as new trends, customer tastes, and business problems shape the market. As the world changes, Hershey wants to stay a major player in the food business while managing the difficulties of a more complex world.
Main Points
- As part of a larger plan to reorganize its business, Hershey is laying off about 200 workers, or 1% of its total staff.
- The company is also creating dozens of new tech and data science jobs to modernize its operations and prepare for future growth.
- To be more efficient and cut costs, the company is focused on improving operations, streamlining processes, and automating key areas.
- Hershey hopes to save $300 million through its attempts to restructure, which it will use to fund its future growth plans.
- Hershey had to raise prices because of rising costs, especially in cocoa. This caused people to spend less, which led to a 17% drop in net sales for the second quarter of 2024.
- Despite these problems, Hershey is still determined to become more flexible and tech-savvy. In the long run, they want to become a “Leading Snacking Powerhouse.”
Hershey’s efforts to restructure show how hard it is for many businesses to keep up with our fast-paced world. However, they also show how exciting embracing new technology and ideas can be. By focusing on speed and future growth, Hershey wants to not only stay in business but also grow in the snack food market.
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