Cadbury jobs cut as Kraft gears up for split, Chairman shift into hands-on role

  • December 7, 2011
  • Matt Paish

Global food and beverage conglomerate, Kraft Foods, has announced it is cutting around 200 jobs at UK confectioner Cadbury.

Kraft has said it intends to divide its business into two independent companies by the end of 2012, and has also announced this week that its current CEO and Chairman, Irene Rosenfeld will head the conglomerate’s planned high-growth global snacks business (which will include the Cadbury brand).

It was Irene Rosenfeld who drove Kraft’s hostile takeover of Cadbury in 2011.

The Kraft split will also result in the creation of a high-margin North American grocery business.

Job cuts are despite £50 million investment

Kraft said that around 200 Cadbury jobs will be cut over two years from next March 2012, despite the company’s plan to invest £50 million (AU$76 million) in Bournville, Kraft’s Birmingham-based operation of Cadbury.

UK-based workers’ union body, Unite, said that if Kraft is investing £50 million for the in its UK operations, there should be no job losses.

Unite’s national officer for the food industry, Jennie Formby said, “We are concerned that the company continues in its refusal to share its mid-to-long term business plans with us and its refusal to say that there won’t be compulsory redundancies in the future.”

The UK Parliament’s Business Select Committee has accused Kraft of flirting with ‘contempt’ of parliament for its repeated refusal to put Irene Rosenfeld forward for questioning by MPs.

Kraft announces North American grocery company leaders

Kraft Foods announced this week that the current President of its North American operations, Tony Vernon, will become Chief Executive Officer of the US$17 billion North American grocery company, following the split.

John Cahill, currently an Industrial Partner of private equity firm Ripplewood Holdings LLC, will become Non-Executive Chairman of the North American grocery company.

Initially, Mr Cahill will serve as Executive Chairman, reflecting the effort required to launch and transition to a public company. Cahill will join Kraft Foods in January 2012 to begin work on the separation.

The new North American grocery business will be responsible for such major brands as Philadelphia cheese, Capri Sun beverages and Jell-O desserts and is expected to generate revenues of US$16 billion.

Other snack food brands currently owned by Kraft Foods include Oreo biscuits, Trident gum, Jacobs coffee and Tang powdered drinks. These brands will be shifted into Kraft’s global snacks company.


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