NORTHFIELD, IL-It’s a big announcement – locally based Kraft Foods revealed Tuesday that it plans to lay off about 1,280 people, remove another 320 positions and close at least one office in Glenview, IL. The moves are part of the company’s plan to split this year into two entirely separate companies, but in contrast to the recent Aon departure announcement, both the Kraft snacks company and grocery firm will remain in the Chicago area.
The company, which had revenue of $49 billion in 2010, employs about 125,000 people worldwide, and about 46,000 people in the United States and Canada. The firm grew from a door-to-door cheese business started by James Kraft in Chicago in 1903, acquiring scores of companies along the way. It’s most recent purchase was Uxbridge, England-based Cadbury for $19.5 billion, a move that some believe set back Kraft’s business.
About 40% of the positions cut will be US sales staff, the company said in a statement. The grocery business will be about half the size of the snacks business, in terms of sales, a company spokesman tells GlobeSt.com. Both new firms are currently nameless.
A number of Kraft office departments will be moving, most to the Chicago area. The Beverages business unit in Tarrytown, NY and the Planters brand in East Hanover, NJ will relocate to the Chicago area by December. However, both of these office facilities have other reasons to remain operational, and a company spokesman tells GlobeSt.com that there hasn’t been a decision on whether the Tarrytown facility will remain. The East Hanover office will become the North American region for the new snacks company.
The company is also keeping open two offices near Toronto. The new grocery business will keep offices in an office in Don Mills, while a new office in Mississauga will have space for the snacks firm. The Oscar Mayer business unit will remain at an office in Madison, WI.
For now, the spokesman says only the Glenview office has been confirmed to be eliminated by the end of 2013. Also, all manufacturing facilities are safe for now, including a distribution facility in Glenview, the spokesman says. “With the split, there’s generally no industrial facilities that handle both sides of the company,” he says. However, the firm is “continuing its review of manufacturing facilities to consider what’s best for both new companies,” according to the statement.
Kraft is now looking at two separate office locations for the headquarters of the grocery and snacks businesses. The spokesman wouldn’t comment on how much space is needed, but says the current Northfield campus would be considered. “We think we will have a decision on where the new headquarters facilities will be by the end of the quarter, and it could happen by the end of January,” he says.
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