ConA­gra cuts 1,500 jobs, HQ move to Chicago

The China Post - - WORLD BUSINESS - BY JOSH FUNK

U.S. pack­aged foods com­pany ConA­gra Foods will elim­i­nate 1,500 jobs — which rep­re­sents 30 per­cent of its of­fice- based work­force — and move its head­quar­ters to Chicago, Illi­nois from Omaha, Ne­braska, with the goal of cre­at­ing a more-ef­fi­cient pack­aged food com­pany.

Com­pany of­fi­cials said Thurs­day that its new Chicago head­quar­ters will have about 700 work­ers by next sum­mer, in­clud­ing top ex­ec­u­tives and con­sumer foods em­ploy­ees who are cur­rently di­vided be­tween Omaha and Naperville, Illi­nois. The com­pany will keep about 1,200 em­ploy­ees in Omaha to han­dle re­search and de­vel­op­ment, sup­ply chain man­age­ment and some ad­min­is­tra­tive func­tions.

About 1,000 peo­ple will lose their jobs in Omaha and roughly 300 Omaha jobs will move to Chicago.

The Naperville of­fice, about an hour south­west of ConA­gra’s new head­quar­ters in Chicago’s Mer­chan­dise Mart, will close, and be­tween 320 and 350 jobs from there will move to the city.

ConA­gra, which makes Chef Bo­yardee, Slim Jim and He­brew Na­tional hot dogs, said the job cuts ex­clude plant po­si­tions and do not in­clude any im­pact from the planned sale of its pri­vate la­bel oper­a­tions. It an­tic­i­pates about US$345 mil­lion in one-time charges over the next two to three years re­lated to the restruc­tur­ing.

“It is crit­i­cal that we run as lean and as ef­fi­cient and as ef­fec­tive as pos­si­ble,” ConA­gra spokesman Jon Harris said.

The jobs be­ing elim­i­nated are pri­mar­ily re­dun­dant po­si­tions or jobs that will be out­sourced, ConA­gra said Thurs­day.

The changes should cre­ate about US$200 mil­lion in cost sav­ings, with more than half of that re­al­ized by the end of fis­cal 2017, ac­cord­ing to ConA­gra. The bal­ance should be achieved in the fol­low­ing year. The com­pany said the sav­ings are in ad­di­tion to ap­prox­i­mately US$150 mil­lion in cost cuts over the last two years. It an­tic­i­pates the plans giv­ing a “mod­est ben­e­fit” to fis­cal 2016 earn­ings.

ConA­gra re­ported a firstquar­ter loss of US$ 1.2 bil­lion last month. The com­pany has been pres­sured by a ma­jor stock­holder, Jana Part­ners, which says ConA­gra’s re­sults have been dis­ap­point­ing since it bought Ral­corp for US$5 bil­lion two years ago. ConA­gra said in June that it will sell the unit so that it can bet­ter fo­cus on im­prov­ing its own name brands.

ConA­gra CEO Sean Con­nolly said it made sense to con­sol­i­date oper­a­tions in Chicago be­cause most of the com­pany’s con­sumer food di­vi­sion was al­ready based in the area. Pre­vi­ously, frozen foods were based in Omaha while other con­sumer prod­ucts were in Naperville.

“To­day the busi­nesses are split by tem­per­a­ture state,” Con­nolly said. “That doesn’t make a lot of sense when you think about how the con­sumer shops.”

Con­nolly is at­tempt­ing to sculpt a leaner com­pany that can de­velop new prod­ucts to sat­isfy con­sumer tastes more quickly while gen­er­at­ing health­ier prof­its.

The Amer­i­can palate has shift- ed rapidly in re­cent years, with con­sumers seek­ing foods that are less pro­cessed and health­ier.

ConA­gra will re­ceive an un­spec­i­fied amount of tax cred­its from Illi­nois based on the salaries of the jobs it plans to move to the state.

Omaha, civic and busi­ness lead­ers have ac­knowl­edged that the loss of ConA­gra’s head­quar­ters will be a blow to the re­gion. Ne­braska Gover­nor Pete Rick­etts and Omaha Mayor Jean Stothert had been in talks with ConA­gra about in­cen­tive pack­ages to keep the com­pany in the city.

AP

A statue of Chef Bo­yardee looks over flags at the world head­quar­ters of ConA­gra Foods in Omaha, Ne­braska, Thurs­day, Oct. 1.

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