Kraft Cutting Jobs in Advance of Split

Company Moving Planters, Beverages Unit From East Coast to Chicago

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Kraft Foods said it will cut 1,600 positions in the U.S. and Canada as it prepares to split into two companies.

The Northfield, Ill. -based company will reorganize its domestic sales team, consolidate its U.S. management centers and trim the corporate and business units, Crain's Chicago Business reports. About 40% of the cuts will be from the sales reorganization, and about 20% will be eliminated positions that already are vacant.

The remaining job cuts will come from various business units and corporate-management centers, a spokesman told Ad Age . The company was not able to specify how many, if any, cuts will come from marketing.

Irene Rosenfeld
Irene Rosenfeld

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

Kraft will cut its U.S. management offices from four locations to two once the North American grocery company is spun off later this year.

Kraft 's Glenview, Ill. management center will close by the end of 2013, and Kraft 's beverage business in Tarrytown, N.Y., and its Planters unit in East Hanover, N.J., will move to the Chicago area by December 2012. Employees of the two East Coast units will have the option to transfer to the future company headquarters.

The headquarters of the global snack company will be based in the Chicago area at a site under consideration, the company said in the statement. The North American regional headquarters for the global snack company will be in the East Hanover campus.

"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," Tony Vernon, president of Kraft Foods North America and CEO of the future grocery company, said in a statement.

Kraft 's snack business will continue to use a direct store delivery model. The North American grocery company will contract local sales to Acosta Sales & Marketing for grocery and mass retail channels. Crossmark will continue to serve the grocery company in convenience stores.

Most of the U.S. retail sales employees will move to the North American region of the global snack company. Kraft expects to have both sales organizations complete by April 1.

"Our plan for a more nimble company, combined with the current economic and competitive pressures, led us to this point," Mr. Vernon said in the statement. "Taking the necessary steps now will enable us to continue investing in our beloved brands to drive growth."

Kate MacArthur is a reporter with Crain's Chicago Business.

Contributing: E.J. Schultz

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