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Cadbury to axe 15 per cent of workforce

19/06/2007

Cadbury Schweppes, the world's largest confectionary company, has announced plans to cut 15 per cent of its global workforce as part of a major cost-cutting exercise.

The UK-based confectioner and drinks giant said the cuts were planned as part of an initiative to improve the group's margins from around ten per cent to a performance in the mid-teens by 2011.

It is not yet clear whether any of Cadbury's UK plants will be affected by the job losses, which will affect around 7,500 people employed as part of the company's 50,000-strong workforce.

The maker of brands such as Dairy Milk, which has its main chocolate-making factory at Bournville in Birmingham, is also set to close around 15 per cent of its confectionary sites as part of the cost-cutting measures.

Cadbury has a strong presence in the UK, with a cocoa processing plant in North Wales, a Herefordshire milk processing plant and a chocolate factory at Keynsham near Bristol among the company's other operations.

In a statement the firm revealed that it expected its cost reduction and efficiency programme to involve an exceptional restructuring charge of around £450 million.

"Our cost reduction initiatives will impact all parts of the group, in sales, general and administration costs and supply chain, in the regions and at the group centre," said Cadbury.

Commenting on the planned cuts, Cadbury's chief executive Todd Stitzer said: "The plans announced today represent the next step in transforming our confectionery business from being the biggest global confectionery company to being the biggest and the best.

"I am confident we have the strategy and the team to deliver continued strong growth and substantially increased returns," he added.

The announcement of job cuts by Cadbury comes as the company prepares to sell off its US-based drinks business, which makes brands such as Dr Pepper and 7-Up.

Cadbury, which has suffered from poor sales within Europe, also saw profits dip last year after being forced to recall around a million chocolate bars following a salmonella scare in the UK.

In a separate first-half trading statement today Mr Stitzer stressed that the company had made a "strong start" to the year in both its confectionary and beverage businesses.





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