Hershey Will Cut Five Percent of Employees

Reuters reports Hershey Co plans to cut 500 to 600 jobs, or up to 5 percent of its workforce, as part of a restructuring aimed at upgrading and enlarging its facilities to compete globally and save some $60 million to $80 milllion in annual costs. Hershey plans to invest $250 million to $300 million on modernizing and expanding its plant. The company will chalk up a "realignment" and start-up costs of $140 million to $170 million over the next three years, it said in a statement. The company forecast on Monday a 2010 adjusted earnings per share of $2.47 to $2.52. It also forecast a 6 percent to 7 percent rise in 2010 revenue from 2009''s $5.3 billion. Much of Hershey''s expected capital investment will go toward a $200 million to $225 million expansion of its existing West Hershey, Pennsylvania plant. The company said it will begin realizing annual savings of $60 million to $80 million by the end of the restructuring effort, around 2014. Hershey has benefited from a better U.S. economy, and also from the fact that the recovery is sufficiently modest to prevent customers from trading up to more expensive chocolates.