The maker of Hershey's Kisses and Reese's Peanut Butter Cups will cut 1,500 jobs over the next three years and open a new factory in Monterrey, Mexico. The reductions will cost as much as $575 million before taxes, the Hershey, Pennsylvania- based company said in a statement today. The company, which owns candy maker Mauna Loa Macadamia, also will allow other companies manufacture some of its products.

Hershey lost market share last year to Mars Inc., the maker of Snickers, which introduced new varieties of M&Ms and Dove bars. Hershey said last month its attempt to boost revenue with cookies and brownies distracted it from selling chocolate, and it posted a fourth-quarter sales decline of 0.7 percent.

"Hershey is under intense pressure," said Marvin Roffman of Roffman Miller Associates in Philadelphia, who follows Hershey and manages more than $410 million in assets. "If your costs are squeezing you, you have to find ways to save money."

Hershey expects the reductions to save it $170 million to $190 million annually by 2010. The company estimates $300 million of the expenses will occur this year. Hershey will close some factories, spokesman Kirk Saville said. He declined to be more specific.

When the plan is completed, Hershey expects 80 percent of its production to be in the U.S. and Canada.