HJ Heinz Co., the ketchup maker taken private by Warren Buffett’s Berkshire Hathaway Inc. and Jorge Paulo Lemann’s 3G Capital, expects about US$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 US$8 billion preferred stake with a 9 per cent dividend, meaning Heinz has to pay his Omaha, Nebraska- based company US$720 million a year on those securities. The US$23.3 billion takeover was completed in June.

Heinz posted a net loss of US$75.9 million in the period from Feb. 8 through July 28 as the company incurred merger-related costs, according to today’s filing. Feb. 8 is the date a merger subsidiary was created for the deal.

BLOOMBERG