Campbell expects to eliminate approximately 770 positions in connection with these initiatives and to incur aggregate pre-tax costs of approximately $75m, nearly all of which will be recorded in the fourth quarter of this fiscal year.
The initiatives are expected to be completed in fiscal 2013. They are expected to generate annual pre-tax savings of approximately $60m beginning in fiscal 2012, increasing to approximately $70m in fiscal 2014.
The actions planned include the following:
Denise Morrison, chief operating officer and CEO elect, said: “The steps we are announcing will help us continue to lower our costs and help fund our plans to drive the growth of the business. The supply chain initiatives will enable us to improve manufacturing efficiency and further adjust the utilisation of our assets to evolving consumer demand.
“While a workforce reduction is always a very difficult decision, these actions will streamline our organisation and improve the level of coverage and the effectiveness of our sales merchandising activities.
“As part of the development of our strategic plan, our leadership team, in consultation with the board of directors, has been examining all aspects of our business, including our current emerging market operations. Though Russia remains an attractive potential growth market, the results of the business we launched in that market in September 2007 have fallen short of original expectations. We believe that opportunities currently under exploration in other emerging markets, notably China, offer stronger prospects for driving profitable growth within an acceptable time frame.”
Morrison and other members of Campbell’s management team will outline the company’s growth strategies at a meeting in Camden on 12 July 2011.
Source: Campbell Soup Company
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