Kraft gears up for spinoff with sales realignment, workforce reduction

NORTHFIELD, Ill. — Realigning U.S. sales, consolidating U.S. management centers and streamlining corporate and business unit organizations are on the to-do list of Kraft Foods as it prepares to spin off its business in two independent public companies before the end of the year.

"When we announced our decision to create two world-class companies last August [the grocery and global snacks businesses], we said both would be leaner, more competitive organizations," Kraft Foods chairman and 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."

The following changes will be implemented:

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  Realigning U.S. sales structure to create more focused teams, which are expected to be in place by April 1, so each company can customize its approach to in-store sales and execution to maximize impact;

  
  


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  U.S. management center locations will be reduced from four to two. This includes the relocation of the beverages business unit in Tarrytown, N.Y., and the Planters brand in East Hanover, N.J., to the Chicagoland area by December 2012 and the closure of the Glenview, Ill., management center by the end of 2013. In Canada, both companies will retain sites in the greater Toronto area;

  
  


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  With leaner structures for both businesses, Kraft plans to eliminate approximately 1,600 positions throughout the United States and Canada over the next 12 months, primarily from sales, corporate and business unit areas. About 20% of these job eliminations currently are open positions. Planned workforce reductions do not include manufacturing facilities, Kraft Foods noted.