Kraft to cut 1,600 jobs in split
(Reuters) - Kraft Foods Inc said that splitting into two companies would lead it to cut about 1,600 jobs in North America this year and that its 2011 profit should be slightly higher than it had previously forecast.
About 40 percent of the job cuts come from the company realigning its U.S. sales division, Kraft said. About 20 percent of the jobs being cut in the United States and Canada are currently open positions, the company said. The planned job cuts do not include any cuts at manufacturing facilities.
The 1,600 job cuts represent about 1.26 percent of the company's total workforce. Kraft has about 127,000 employees, including about 46,500 in North America.
Kraft also said its 2011 net revenue would be up by about 10 percent, as it ended the year with strong momentum around the world despite a tough operating environment.
It expects to report 2011 operating earnings per share of at least $2.28, including a penny per share hit from currency in the fourth quarter. Previously Kraft had forecast operating earnings per share of at least $2.27, excluding any potential currency impact in the fourth quarter.
Analysts, on average, had expected Kraft to earn $2.27 per share this year, according to Thomson Reuters I/B/E/S.
Kraft's 2011 organic net revenue -- or revenue excluding the impact of acquisitions, divestitures, currency and accounting calendar changes -- should be up about 6.5 percent, versus its prior outlook at least 6 percent. The growth was driven by mid-single-digit percentage growth in North America and Europe, and double-digit percentage growth in developing markets, the company said.
Shares of Kraft climbed 1.7 percent to $38.42 in afternoon trading on the New York Stock Exchange, hitting their highest level since early 2003.
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