ConAgra Foods Inc said it will cut about 1,500 jobs and outsource technology and back office positions, joining other packaged food companies in announcing cost cuts, and the company also plans to move its headquarters to Chicago from Omaha.
ConAgra rivals including Campbell Soup Co and General Mills have cut jobs and costs as consumers shift to fresher products from processed items.
Processed food companies have also been under pressure since Brazilian private equity firm 3G Capital Partners, famous for aggressive cost-cuts, formed Kraft Heinz Co earlier this year and said it would cut $1.5 billion in annual costs by 2017.
ConAgra, which makes Slim Jim beef jerky and Chef Boyardee pasta, has reported an increase in net sales only twice in the last six quarters. Sales rose 1.1 percent to $2.79 billion in the quarter ended Aug. 30.
As part of its cost-cutting plans, ConAgra also said it will introduce zero-based budgeting, which requires managers to justify each year's costs from scratch rather than assume the previous year's budget as a starting point.
ConAgra said it expects to save at least $300 million, with $200 million from the job cuts alone, within the next three years as a result of the cost cuts.
The layoffs represent about 30 percent of ConAgra's office-based workforce. Jobs in its plants will not be affected. ConAgra had about 32,900 employees as of May.
ConAgra estimated restructuring-related cash charges of about $345 million over the next two to three years.
Shifting its headquarters to Chicago will bring ConAgra to "the heart of one of the world's business capitals and consumer packaged goods centers" and help it to attract top talent, the company said. The move is expected to start in summer next year.
Other Chicago-based food companies include candy maker Tootsie Roll Industries Inc and PepsiCo Inc-owned Quaker Oats Co.
About 700 ConAgra employees, including senior leadership and certain posts in the consumer foods business, will shift to Chicago's Merchandise Mart, the company said.
ConAgra will continue to maintain a presence in Omaha, including about 1,200 employees within key administrative, research and development and supply chain roles.
Shares of the company, which said in June it will sell its struggling private label food business, closed at $40.51 on Wednesday.