ConAgra Foods said it will cut about 1,500 jobs and outsource technology and back office positions to reduce costs, and move its headquarters to Chicago from Omaha next year.
Reuters reported that the cuts come as the company is making the move from Omaha, Nebraska to Chicago and plans on reducing costs by around $300 million over the next few years.
Beginning in the summer of 2016, around 700 employees will be located in the new offices in the city’s Merchandise Mart, including the company’s senior leadership team and certain functions of the Consumers Food business, which are located in Omaha and Naperville, Ill.
Plant positions will not be eliminated in connection with the restructuring according to a press release.
The company is anticipating $345 million in charges that are one-off over the upcoming two to three years that are related to this restructuring.
However, the company will continue to maintain a significant presence in Omaha, including about 1,200 employees within key administrative functions, as well as research & development and supply chain management. ConAgra struggled to merge those operations with its branded food business and announced plans in June to sell the division.
Mayor Rahm Emanuel applauded the company’s move to Chicago. Last month, it wrote down the value of the private-label business by nearly $2 billion.
Omaha Mayor Jean Stothert says she had a conversation with Connolly on Wednesday and asked him directly if there was anything the city or state could do to change their direction.
Ricketts said this morning the Nebraska Department of Labor is ready to help those losing their jobs and says ConAgra’s decision “is a reminder why we must continually look for new ways to ensure our tax rates and incentive programs remain competitive”. Additionally, the Company makes frozen potato and sweet potato items, along with other vegetable, spice, bakery goods, and grain products for its commercial and foodservice customers.
Omaha is also home to other major companies in different industries, such as Mutual of Omaha, Union Pacific, and Warren Buffet’s Berkshire Hathaway.