Premier Foods set to axe 600 jobs
Published 17/01/2012 | 08:42
Mr Kipling and Hovis firm Premier Foods has warned that it is to cut 600 jobs - 5% of its workforce - in a bid to save £40 million by next year.
The debt-laden group, which was recently given extra time by its banks to get its finances in order, wants to reinvest the savings in growing its eight key brands, which also include Batchelors, Ambrosia, Oxo and Bisto.
It will double marketing spend behind the "power" brands this year, starting with television adverts for Sharwood's and Loyd Grossman next month.
The planned job cuts, which are subject to a consultation process, are expected to focus on overhead functions and reflect the group's reduced size following recent disposals such as Quorn and its canning operation.
The St Albans-based company, which employs around 12,000 people in the UK and Ireland, has been fighting for survival in recent months as profits plummet and it struggles to keep up with repayments on its £850 million debt mountain.
Its share price has collapsed from 34p to 5.75p over the past year after a series of profit warnings as shoppers increasingly switch to supermarket own-label brands and it is forced to put on more promotions to compete.
Premier said trading over Christmas had been in line with its expectations but that results for 2011 will be towards the lower end of City hopes.
New chief executive Michael Clarke, who joined the business from Kraft, said: "While decisions to reduce the workforce are always difficult, I'm convinced we are taking the right steps in the long- term interests of the business, employees and our stakeholders."