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Hershey Kisses 1,500 Jobs Goodbye

It rolls out the firings the day after Valentine's Day.
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Hershey

(HSY) - Get Hershey Company (HSY) Report

will fire 1,500 workers over three years in a bid to increase efficiency.

The Hershey, Pa., chocolatier said it will cut production lines by more than a third and outsource production of what it called low value-added items. Hershey will also build a new plant in Mexico. The company said it expects the more-efficient supply chain arrangements to boost its gross profit margin.

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"Finished products will be sourced from fewer facilities, each one a center of excellence specializing in Hershey's proprietary product technologies," Hershey said. "Increased access to borderless sourcing will further leverage the company's manufacturing scale within a lower overall cost structure."

The company expects the plan to result in $475 million to $525 million in pretax business realignment charges and $50 million in project implementation costs, to be recognized over the next two years.

The news comes after a series of earnings shortfalls at the company.

Shares rose $1.14 to $52.44.