Cadbury Schweppes PLC has announced its plans to cut 7,500 jobs and close 11 (approximately 15%) of its candy factories by 2011. However, the company has not disclosed further details on where the cuts are likely to occur.
That is not exactly sweet news for the 50,000 Cadbury workers at 35 confectionery sites across Europe, the Middle East, and Asia, and 59 other bottling and manufacturing sites worldwide.
Cadbury Schweppes is also selling its U.S. beverages unit. Cadbury Schweppes Americas Beverages, which makes Dr Pepper, 7-Up, and Snapple soft drinks, is based in Plano, Texas. After the sale, the company will be renamed Cadbury PLC.
Officials at the iconic British candy maker say they hope to keep growing the top line while improving margins.
The company’s chief executive officer, Todd Stitzer, said during a conference call that “there are certain countries where we know we can do better,” citing the United Kingdom, Russia, and China.
Serious Concern Globally
Unite, the union that represents 2,000 Cadbury Schweppes workers in Britain, said the job cuts are a serious concern.
“We have worked hard with Cadbury in recent years and cooperated in a change program which means the U.K. factories are extremely efficient. We are, therefore, concerned by today’s announcement, which we are convinced is driven by the threat of a takeover by private equity,” union official Brian Revell said in an e-mailed statement.
In the United Kingdom, Cadbury employs about 6,000 workers. It has a cocoa processing plant in north Wales, a milk processing plant in Herefordshire, two manufacturing sites in Bristol, a sugar manufacturing plant in Sheffield, a medicinal confectionery business in Devon, as well as the head office in London and commercial offices in Hertfordshire.
Cadbury Australasia spokeswoman Robyn Newman said 15% globally does not necessarily translate to 15% within any particular country.
Cadbury’s New Zealand operations include factories in Dunedin (about 600 full-time staff) and Auckland (about 500 part-time staff).
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In Australia, state secretary of the Australian Manufacturing Workers’ Union, Anne Urquhart, called this “a really urgent situation.”
She cited concern for the 820 Australian workers and what possible impact this announcement could have on their jobs at the country’s two Cadbury factories. She hopes to meet with Cadbury management by the end of this week.
“We need to allay the fears of our members and tell them their jobs are safe, or be told very quickly what this grand plan means,” she said.
Cadbury announced it will merge a number of its regional units. The group’s Middle East and Africa divisions will now be known as British, Ireland, Middle East, and Africa (BIMA) by the second quarter of next year.
Cadbury’s Kenyan subsidiary covers Cadbury East & Central Africa, which includes Angola, Mozambique, Mauritius, Tanzania, Zambia, Uganda, DRC, Kenya, Rwanda, Burundi, and Djibouti.
These cuts come less than a year after Cadbury lowered its sales forecast due to higher costs and a salmonella scare (trace amounts were detected in some chocolate bars).
This news also trails the company’s previous four-year restructuring plan, known as Cadbury’s Fuel For Growth program, which has already seen 6,000 job losses and the closure of 33 factories worldwide.