Kraft split will eliminate 1,600 jobs

Packaged food giant Kraft Foods said Tuesday that it will be eliminating about 1,600 jobs in 2012. The cuts will amount to about 1.26 percent of its total U.S. work force and about 40 percent of its U.S. sales force. The company cites organizational restructuring as the reason for the force reduction.

Company plans to split in two

The company owns Cadbury, Nabisco, Oreo, Maxwell House, Velveeta cheese, Cheez Whiz, Jell-O and Oscar Mayer among other popular food brands. It released a statement saying the cuts are part of its planned split into two public companies before the end of the year. One of those companies will concentrate on grocery items and the other on snack foods.

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Manufacturing jobs remain secure

The job cuts, the company says, will be mostly in the “sales, corporate and business unit areas.” There will not be cuts in the company’s manufacturing employees. Twenty percent of the cuts will be for jobs that are currently unfilled, the statement said.

‘A more nimble company’

Tony Vernon, Kraft’s North America President, said in the statement:

“Our plan for a more nimble company, combined with the current economic and competitive pressures, led us to this point.”

Facility closures

Management facilities in Tarrytown, N.Y., and East Hanover, N.J., will also be closed. But 225 management employees from the Tarrytown facility will be relocated to Chicago, as will 36 from the Planters division in East Hanover.

Chicago to host both companies

Under the restructuring, both the grocery and the snacks division will be located in the Chicago area. Although many will be left unemployed as part of the split, it will add a few dozen jobs in the Chicago area.

The job cuts are to be finished by April 1, the company said.

Kraft’s shares were up by 1.5 percent Tuesday following the announcement.

Sources

CNN
Naperville Sun
Reuters