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Kraft Foods has announced it will lay off 1,600 North American workers as it readies to split the company in two.Nearly 40% of cuts to headcout will come from the U.S. salesforce and corporate arm over the next 12 months.
“When we announced our decision to create two world-class companies last August, we said both would be leaner, more competitive organisations,” CEO Irene Rosenfeld said. “For the past year, the North American team has been working to streamline operations to deliver sustainable top-tier performance and continue to invest in our iconic brands. We’re confident that this transformational work will improve effectiveness and fuel the future growth of both companies.”
Kraft executives cited differing methods for taking product to market for the layoffs. The grocery unit will outsource to Acosta Sales & Marketing and CROSSMARK to reach mass retailers and convenience stores, respectively. Kraft’s snack business will maintain a U.S. sales team.
The company will close offices in Tarrytown N.Y. and East Hanover, N.J., relocating both to the Chicagoland area by December 2012. Kraft will also shutter its management centre in Glenview, Ill., by the end of 2013.
The two separate companies will retain office space in Canada, though the new snacks-focused business will move to Mississauga.
In a separate announcement this morning, Kraft also raised fourth quarter guidance by a penny. The Macaroni and Cheese manufacturer expects operating earnings per share of at least $2.28.
Shares up more than 1.5% on the news.