Heinz to cut 1,200 jobs

HJ Heinz Co., the ketchup maker taken private by Warren Buffett’s Berkshire Hathaway Inc. and Jorge Paulo Lemann’s 3G Capital, expects about $160 million in severance-related expenses tied to job cuts.

About 1,200 employees are affected as part a plan to eliminate corporate and field positions worldwide, Pittsburgh-based Heinz said today in a regulatory filing. The company employed about 31,900 as of April 28, the end of its fiscal year.

Managers appointed by 3G, including new Chief Executive Officer Bernardo Hees, are cutting costs as the company faces payments tied to the financing of the deal. Heinz also shut a factory in China and reduced manufacturing at a U.K. facility, according to today’s filing.

“The company is investing in productivity initiatives designed to increase manufacturing effectiveness and efficiency,” according to today’s filing.

Buffett, 83, took an $8 billion preferred stake with a 9 percent dividend, meaning Heinz has to pay his Omaha, Nebraska-based company $720 million a year on those securities. The $23.3 billion takeover was completed in June.

Hees that month announced the departure of 11 top executives. The company said in August that it was eliminating 600 office jobs in the U.S. and Canada, with more than half the cuts in Pittsburgh. Heinz also said it was weighing the elimination of about 250 positions in the U.K. and Ireland. Read more >>

Handful of billionaires are quietly dumping their American stocks and fast

Warren Buffett (Photo credit: MarkGregory007)

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.

Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.

In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.

With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.

Unfortunately Buffett isn’t alone.

Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee. Read more >>

Billionaires Dumping Stocks, Economist Knows Why

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.

Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.

In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.

With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome. Unfortunately Buffett isn’t alone.

Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee. Read more >>