Kraft is to cut 1,600 jobs, most of them in Sales positions in North America this year as it moves ahead with its plan to separate its US grocery business from its global snacks unit ; to create two world-class companies which would be leaner, more competitive organisations.
Kraft is realigning its US sales teams, with the snacks business utilising a store delivery model and the grocery business using warehouse distribution.
The company also would relocate its drinks and peanuts businesses from New York and New Jersey to the Chicago area in an effort to consolidate management centres from four to two.
Most employees whose jobs were being moved would have the opportunity to transfer to the future grocery headquarters in Illinois.
While the cost reductions should benefit margins, additional costs associated with the operation of two separate units could exceed the planned savings.
About 20 per cent of the positions Kraft is cutting are currently open.
In spite of the job cuts, the company will probably have to make hires in other areas such as accounting and human resources.
According to Kraft, the job cuts would help the company be more “nimble” and allow it to invest more aggressively in its brands.