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Kraft to cut 1,600 jobs in preparation for company split

By Caroline Scott-Thomas , 18-Jan-2012

Kraft Foods has said it will cut about 1,600 jobs from its US and Canadian workforce over the next 12 months, as it prepares to split into two separate companies.

The layoffs represent about 3.4% of the company’s 46,500 North American employees, with the cuts set to concentrate on sales and corporate staff, according to a company announcement released Tuesday. Shutting two of the company’s four management center locations will account for about 40% of job losses, it said, and another 20% of eliminated positions are currently open.

"When we announced our decision to create two world-class companies last August, we said both would be leaner, more competitive organizations," said chairman and CEO Irene Rosenfeld.

The company said that manufacturing jobs would not be affected by these layoffs, although it added: “With the impending separation into two independent companies, Kraft is continuing its review of manufacturing facilities to consider what's best for both new companies.”

Kraft said it would close its management center in Glenview, Illinois by the end of 2013 and relocate its beverages business unit in Tarrytown, NY and its Planters brand in East Hanover, NJ to the Chicagoland area by December this year.

Executive vice president and president of Kraft Foods North America, and CEO of the future grocery company, Tony Vernon said: "Our plan for a more nimble company, combined with the current economic and competitive pressures, led us to this point… Consolidating our management locations is a sound business move. Having the majority of our business units together in one location will provide greater development opportunities for our people and will help us continue building our brands more efficiently and collaboratively."

Kraft Foods’ split into a North American grocery company and a global snacks company is set to be completed by the end of 2012.

The company is the just latest major employer in the food sector to announce significant job cuts, following agribusiness giant Archer Daniels Midland, which said last week it intend to slash 1,000 jobs, or about 3% of its global workforce, and Cargill, which announced in December its plan to cut 2,000 jobs worldwide, equivalent to about 1.5% of its total staff.

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