Kraft Foods is broadening its ongoing Sustainable Growth Plan, resulting in the loss of an additional 8,000 jobs, approximately 8% of the workforce.
The cost-reduction plan was initiated in 2004 with the closure of 19 plants and the loss of 5,500 jobs. The new cuts should add $2.5bn in pre-tax costs to the original, bringing the total cost to $3.7bn.
The European division will be part of the significant restructuring plans. The product line, already reduced by 20% since 2004, will be trimmed by a further 10%.
Despite a 23% rise in fourth quarter earnings for October-December, Kraft said high commodity costs led to increased production costs. These were only partially offset by price increases. Four quarter volume declined by approximately 2%.