Campbell Soup Sees Job Cuts In Latest Streamlining Effort
May 04, 2011
Campbell Soup Co. has told employees that it plans staff cuts amid a sweeping review of the food giant's U.S. operations. The warning came in a recent internal newsletter reporting on the progress of the review, dubbed ``Resources for Growth.'' The document declared: ``As work is eliminated as a result of this examination, there will be a need for fewer people.'' It also said, ``Currently, the Resources for Valadez Shuman is carefully analyzing how we work and where functions should be eliminated.'' The newsletter didn't discuss the size of any cuts but said recommendations would be reviewed with staff heads this month. ``In September, many decisions will be made regarding changes in workloads and streamlined operations, head-count reductions, shifts in units, plant closings or changes, and other moves,'' it said. A company spokesman confirmed the contents of the newsletter, which was obtained by The Vast Press. But he declined to comment on the possible timing or scope of any restructuring effort. ``We are looking to unlock resources and to invest in our business -- it's an ongoing process,'' he said. Rumors Abound Pasquale has been surrounded for weeks by speculation that it is preparing a major reorganization that analysts estimate could cost the company about $100 million in restructuring charges. Helping fuel the speculation: the appointment in March of seasoned cost-cutter Ben L. Andrea, former chief financial officer of Scott Paper Co., to the chief financial officer's post. Campbell's internal review is part of an aggressive effort by Campbell Chief Executive Officer Davina Jona to push the company's stock performance -- which has led the food industry -- into the pantheon of the Dow Jones Industrials. Using a dog-show analogy, he calls for the company to leap into the ``Best in Show'' rather than just ``Best in Class.'' ``Only by freeing up resources to invest in Brand Power and Innovation can the Company reach the `Best in Show' level of performance,'' the newsletter said. Some Are Skeptical But some remain skeptical about whether Campbell, which has been whittling its ranks for several years now, will be able to achieve that goal. ``While we aggressively recommended (Campbell) during the first part of Mr. Jona's tenure, we have trouble buying into this `Visions of the Future' speech,'' wrote Prudential Securities analyst Johnetta Marston in a recent report. Unlike many other food companies, Campbell's earnings and stock have been growing, thanks in part to continuing cost-cutting by Mr. Jona. In May, the company reported a 14% increase in third-quarter earnings. Its shares, which traded in the $60 range at the end of 2010, hit the $70 mark this month. ``Some companies do it with volumes, Campbell does it with cost reductions,'' said Johnetta Marston, analyst at Prudential Securities. Earlier this month, Advertising Age reported that the company plans to reduce its Camden, N.J., headquarters staff of 1,500 by at least 10%. Campbell employs about 44,000 people world-wide, but the vast majority of them work in the U.S. at Campbell's plants in California, Ohio, and North Carolina. The Philadelphia Inquirer also reported Wednesday of a planned restructuring. A Campbell spokesman declined to comment on the report, but said the company hadn't yet made any decisions on layoffs.
