Kraft Heinz to Move Chicago-Area Headquarters to City Center

Kraft Heinz Co. will move its Chicago-area headquarters to the city's center early next year after decades in the suburbs, the company said on Thursday, in the latest shake-up after it completed its merger earlier this month.

Kraft Heinz didn't say how the move would affect the roughly 2,000 employees now working at its 700,000 square-foot offices in Northfield, Ill., about 20 miles outside the city, where Kraft moved in 1990. The planned downtown office totals 170,000 square feet over five floors.

Kraft Heinz, which is being run by Brazilian private-equity firm 3G Capital Partners LP, will continue to operate a second headquarters in Pittsburgh, Pa., Heinz's longtime home, spokesman Michael Mullen said Thursday. The company now has about 900 employees in Pittsburgh, following multiple rounds of jobs cuts since 3G took over Heinz two years ago.

3G and Warren Buffett's Berkshire Hathaway Inc., which also invested in Heinz, agreed in March for Heinz to acquire Kraft. The deal closed on July 2, creating the No. 5 food-and-beverage company in the world by sales.

3G is known for radically changing corporate culture at the companies it oversees—which also include Burger King, now a unit of Restaurant Brands International Inc.— cutting staff, curbing perks, and using a stringent method of budgeting to make businesses more efficient. When the Kraft-Heinz deal was announced, the Brazilian leadership team said it expected to cut annual costs of the combined company by $1.5 billion.

Since then, Kraft Heinz has announced a slew of senior management changes that put 3G-appointed employees in the majority of the top roles. Industry observers widely expect it to unveil factory closures or downsizing and more widespread corporate layoffs in coming months—expectations likely to be reinforced by the sharply reduced size of the new office space.

The new Kraft office will have an open layout spanning five floors. The move to downtown will "firmly establish our dynamic new culture, based on meritocracy, speed, efficiency and collaboration," Mr. Mullen said in a statement.

Other companies have been moving into Chicago and other urban spaces, in part to attract younger talent in touch with budding consumer trends—which is especially important for food companies like Kraft that have struggled to keep their brands relevant.

Kraft opened a swanky new downtown office in spring 2014, hoping it would help recruit employees. At the time, executives said the satellite office would also make meetings easier and improve commuting for some of its Chicago-area staff, roughly a third of which lived in or near downtown. Mr. Mullen said that space would now be subleased.

Moving downtown would be a return to Kraft's roots, where founder J.L. Kraft first began selling cheese to local merchants in 1903.

Kraft had already sold the real estate at its Northfield corporate campus in early 2013, after splitting with its global snacks business now called Mondelez International Inc. At the time, Kraft said it would lease back the space for a minimum of 10 years.

Write to Annie Gasparro at [e-mail]

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