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.
"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.