This Year, Kraft Foods Plans 1,600 Layoffs
Most players in the market believed that the worst ended two years ago, but 2011 came as big surprise for a lot of them. For many, 2010 and 2011 was just as worst as 2008, and those that haven’t learned the lessons of the financial meltdown now are forced to reorganize. It is exactly what Kraft Foods is doing, company that has announced this year it plans to operate 1,600 layoffs throughout North America.
According to a press release, Kraft will cut about 1,600 jobs in North America this year. There are several reasons behind this decision, but the foremost important is that Kraft Foods will be splitting into two separate companies. Add to that the fact that the 2011 profit should be higher than previously estimated and you’ll find a company in full reorganization process.
Kraft Foods has about 127,000 employees throughout the world, out of which 46,500 are in North America. As stated by Kraft, about 40 percent of the job cuts are due to the company realigning its U.S. sales division. The company also stated that about 20 percent of the layoffs in the United States and Canada are currently open positions.
Kraft is the largest North American packaged food company and has decided to split operations as of August 2011. As reported by those involved, Chief Executive Irene Rosenfeld will lead the snacks business and North America President Anthony Vernon will be CEO of the North American grocery business.
Meanwhile, Kraft is waiting for the data on its 2011 revenue. The company estimates that its 2011 net revenue would be up by 10 percent, thanks to the increased sales during the last month of the year.
Basically, for 2011, Kraft expects operating earnings per share of at least $2.28. A previous estimate of the company was of at least $2.27 per share, excluding any potential currency impact in the fourth quarter.
Reuters writes that Kraft’s organic net revenue for 20011 “should be up about 6.5 percent, versus its prior outlook at least 6 percent”. The company said that the “growth was driven by mid-single-digit percentage growth in North America and Europe, and double-digit percentage growth in developing markets”.