Against the backdrop of a disappointing -- but still profitable -- mid-year financial report, Kraft Heinz is cutting 400 jobs this year, hinting at factory closings and ratcheting up a companywide effort to reduce costs.
Kraft Heinz stock, which hit a high of $92.20 on May 31, 2017, closed on Aug. 13 at $25.96, its all-time low.
Net sales for the six months ended June 29 were $12.365 billion, down nearly 5% from the $12.994 billion a year earlier. Net income was $854 million, down from $1.757 billion in 2018.
There also was a non-cash impairment loss of $474 million primarily related to six brands: Miracle Whip, Velveeta, Lunchables, Maxwell House, Philadelphia, and Cool Whip. That was the result of an annual impairment test as of March 31.
"These brands had an aggregate carrying value of $13.5 billion prior to this impairment and will have an aggregate carrying value of $13.0 billion after impairment," the statement said.
"We have restructuring programs globally, which are focused primarily on workforce reduction and factory closure and consolidation," the company said in its second-quarter Securities & Exchange Commission filing. "As of March 30, 2019, related to these programs, we expect to eliminate approximately 400 positions, 100 of which were eliminated in the first quarter of 2019."
The restructuring program plans to reduce headcount by 1,800 jobs. Last year, Kraft Heinz cut headcount by 1,400 positions, mostly in foreign markets.
Kraft Heinz filed its annual report for 2018 after a delay of more than three months, caused by accounting irregularities that led the company to misstate earnings and other financial data.
The company shocked investors in February when it the company wrote down the value of some of its best-known brands by $15.4 billion, cut the dividend and generally acknowledged that management's past success at simultaneously cutting costs and raising value was not working.