Kraft Foods Inc. has announced that it’s cutting 1,600 jobs in the United States as it streamlines operations before splitting into two public companies by the end of this year, the Chicago Sun-Times reported. That’s about 3.5 percent of Kraft’s US workforce, according to the Financial Times.
About 40 percent of the layoffs will occur in Kraft’s sales force, since the company plans to outsource local retail sales functions to two contractors that it will oversee – Acosta Sales & Marketing and CROSSMARK – the (New Jersey) Star-Ledger reported.
Another 20 percent of the cuts will come from not filling vacant positions, Kraft officials said, according to the Star-Ledger. The rest of the cuts will come from trimming Kraft’s corporate and business units.
“When we announced our decision to create two world-class companies last August, we said both would be leaner, more competitive organizations,” CEO Irene Rosenfeld said in a statement, the Chicago Sun-Times reported.
Last year, Kraft said it will split into a company that sells global snacks, including Oreos, Trident gum and Cadbury and Milka chocolates, and a separate company that focuses on the North American grocery business, including Kraft macaroni and cheese and Maxwell House coffee.
More from GlobalPost: Kraft Foods will split into two companies by 2012
Kraft also announced that it would relocate its drinks and peanuts businesses from New York and New Jersey to the Chicago area, the Financial Times reported. Most employees will have the opportunity to transfer to Illinois.
Erin Lash, analyst at Morningstar, told the Financial Times that it is important for the Kraft to streamline ahead of its break-up but she expects the company will have to hire in other areas like accounting and human resources.