Confectionery and drinks giant Cadbury Schweppes has announced plans to cut 15% of its staff by the year 2011.<\/p>\n
The UK firm said that 7,500 staff would be made redundant as part of a cost reduction plan that would also see about 15% of its manufacturing sites close.<\/p>\n
Cadbury, which employs 50,000 staff globally, has yet to say whether any of its UK plants will be affected.<\/p>\n
The firm’s headquarters are in London, while its main chocolate-making factory is based in historic Bournville, Birmingham.<\/p>\n
BBC Business Editor Robert Peston said the Bournville site was likely to be largely unaffected.<\/p>\n
Cadbury has another chocolate plant in Keynsham, near Bristol, and a cocoa processing operation in North Wales.<\/p>\n
It also has a milk-processing facility in Herefordshire, a sugar factory in Sheffield and a medicinal confectionery business in Crediton, Devon.<\/p>\n
Cadbury’s shares had fallen 1.3% to 697 pence by early afternoon trading in London.<\/p>\n
The reorganisation will cost Cadbury approximatley \u00c2\u00a3450m in a one-off charge.<\/p>\n
But it said that as a result, its profit margins should increase from 10.1% to the mid-teens by 2011.<\/p>\n
The Transport & General Workers’ Union, which represents more than 2,000 of Cadbury’s UK workforce, said the news of job cuts was a “grave concern”.<\/p>\n
“Cadbury’s is an iconic British brand which is a good and successful company that is clearly profitable,” said Brian Revell, the T&G’s national secretary for food and agriculture.<\/p>\n
“We have worked hard with Cadbury in recent years and co-operated in a change programme which means the UK factories are extremely efficient.<\/p>\n
“We are, therefore, concerned by today’s announcement which we are convinced is driven by the threat of a takeover by private equity.”<\/p>\n
Cadbury added that it would probably now sell off its drinks business, as part of plans to split the company in two.<\/p>\n
The company said unnamed parties had expressed an interest in buying the Schweppes unit, which produces drinks such as Dr Pepper and 7-Up.<\/p>\n
This sale could raise more than \u00c2\u00a37bn, and the interested parties are said to be private equity groups.<\/p>\n
US newspapers say two private equity consortia are looking at Schweppes, with the first comprising Bain Capital Partners, Thomas H Lee Partners and Texas Pacific Group.<\/p>\n
The second is said to be Blackstone Group, Kohlberg Kravis Roberts and Lion Capital.<\/p>\n
Others say Schweppes could see a third offer by a group led by Canadian drinks-maker Cott.<\/p>\n
Following the expected sale, Cadbury said it would simply remove the Schweppes part of its name.<\/p>\n
The firm has been under pressure after bad European sales and a costly salmonella scare here in the UK.<\/p>\n","protected":false},"excerpt":{"rendered":"
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