When Warren Buffett buys a company, he usually leaves senior employees in place and commits to holding the business forever. But now, his partner is changing course.
What was slated as an annual leadership meeting became an opportunity for new CEO Bernardo Hees to dismiss 11 senior executives, according to three people familiar with the gathering.
The June 17 session came just after Heinz’s $23.3 billion sale to Warren Buffett’s Berkshire Hathaway and Jorge Paulo Lemann’s 3G Capital.
While Buffett committed more than $12 billion to the deal and has 50 percent of the common equity, 3G is in charge of operations.
Since taking over, Hees has eliminated hundreds of jobs, grounded corporate jets, limited spending on office supplies and pulled the plug on mini-fridges at the office. Savings will help pay down $12.6 billion in borrowing supporting the deal.
Berkshire also holds $8 billion in preferred stock that receives a 9 percent dividend, or $720 million a year.
Annual interest expense at Heinz probably doubled to $560 million since the takeover, said Dave Novosel, and analyst at Gimme Credit LLC.
Heinz shook up leadership to promote accountability and faster decision making, according to a statement from Michael Mullen, a Heinz spokesman. “Heinz will reinvest more of our dollars where they directly impact our business — in our brands and our products, and most importantly, in benefiting our consumers,” he said.