Kraft to cut 200 jobs
Kraft Foods is to cut 200 jobs under plans, which include £50 million investment in its chocolate and biscuit manufacturing, according to the company.
It notes that it will be making “significant investments” across four of its sites over the next two years. But 200 jobs will be cut through redeployment and voluntary redundancies over two years from next March. Around £6 million will be invested in biscuit-making at the firm’s Sheffield plant, with the creation of 20 jobs, while £44 million will be invested in chocolate manufacturing at Bournville, Chirk in North Wales and Marlbrook in Herefordshire.
Ian Dearn, head of manufacturing at the Sheffield plant, says, “We are proud to have been selected to bring the manufacture of BelVita and world-famous Oreo cookies to the UK for the first time.”
In March last year, following its acquisition of Cadbury’s, Kraft made a series of commitments to employees, including no further plant closures and no compulsory redundancies in UK manufacturing for two years. The firm said these commitments remained “fully in force” and were not changed by the latest announcement.
The Unite union’s national officer for the food industry, Jennie Formby, said: “While we welcome the investment plans, we have great concern about the 200 job losses. Our view is that, if Kraft is investing £44 million for the expansion of its UK factories, there should be no job losses and we will be strongly pressing for that outcome when we talk to management about this issue in the new year.”
In related news, Kraft has released more details of its new structure when it will split in two businesses by the end of 2012. It announced that chairman and CEO Irene Rosenfeld will stay on as chairman and CEO of the $31 billion global snacking company, and Tony Vernon, president of Kraft Foods North America, will be CEO of the North American grocery business it becomes a stand-alone, $17 billion company.
Kraft is also bringing in John Cahill, a partner with Ripplewood Holdings, a private equity firm where Vernon worked for three years before joining Kraft. He has experience with corporate separations, having been chairman and CEO of PepsiCo Bottling Group when it separated from PepsiCo in 1999. PepsiCo has since bought it back.
Cahill will be executive chairman beginning in January, assisting with financial matters relating to the split. He will then transition to a non-executive chairman position with the grocery company, expected to be a part-time role.
