Candy maker Hershey Co. (NYSE: HSY) said Thursday it will cut one third of its production lines and eliminate 1,500 jobs over the next three years, or about 12 percent of its workforce, after its most recent quarterly results came in below expectations.

Hershey unveiled a three year plan on Thursday that it says will improve its manufacturing, sourcing and customer service abilities. It also said it would open a facility in Monterrey, Mexico that will reduce its total U.S. and Canada manufacturing to 80 percent from 90 percent.

Last month, the company reported that its fourth quarter sales were down 0.7 percent and net profit was down nearly 10 percent compared to the fourth quarter of 2005.

Over the next three years, the company estimates the program will cost between $525 million to $575 million. By 2010, the company expects annual savings of $170 million to $190 million.

The company expects long-term benefits of the plan will allow for more investment in the Hershey brand, new products, and international expansion.

Last month, the company signed a joint venture in China with Lotte Confectionary company as part of its global expansion.

Shares of Hershey rose 1.56 percent, or 80 cents, to close at $52.10 in Thursday Trading on the New York Stock Exchange.