Illinois, USA — KRAFT Foods Inc will cut 1,600 positions in North America as it prepares to split its business in two.

The food company said yesterday that it plans to eliminate the positions throughout the US and Canada during the coming year. The cuts will be made among its sales, corporate and other business units. About 20 per cent of the job eliminations are currently open positions.

Kraft has roughly 127,000 employees worldwide, including 46,500 in North America.

The company announced in August that it would split into two independent companies: a global snacks business and North American grocery business. Kraft said the moves are needed to help the businesses run more effectively.

The bulk of the cuts — about 40 per cent — will be made among sales positions. Kraft plans to contract sales for its grocery business to two agencies: Acosta Sales & Marketing for its grocery store and big box retailer sales and Crossmark for convenience store sales.

Kraft also said that it is consolidating its other offices across the country, where some management, researchers and other employees work. It plans to halve the number of US management centres to two from four.

The company’s offices in Madison, Wisconsin, where its Oscar Meyer business is based, will remain open. Its East Hanover, New Jersey, facilities, where its snacks business is based, will become the US headquarters for its global snacks business. The employees in its Tarrytown, New York, offices, where its beverage business is based, are moving to the greater Chicago area. And its cheese, dairy and grocery offices in Glenview, Illinois, will close.

Kraft did not cut jobs at its manufacturing facilities at this time. But the company said in a statement that with the pending split, it is still reviewing this part of its business to consider what is what’s best for both new companies.

“Making these tough choices is never easy, and we recognise the impact these changes will have on many of our people and their families,” Tony Vernon, executive vice-president and president of Kraft Foods North America and CEO of the future grocery company, said in a statement. “But our plan for a more nimble company, combined with the current economic and competitive pressures, led us to this point. Taking the necessary steps now will enable us to continue investing in our beloved brands to drive growth.”