Kraft to eliminate 1,600 positions in US and Canada

American food company Kraft Foods, which is planning to split into two independent companies this year, announced that it would eliminate approximately 1,600 positions throughout the US and Canada over the next 12 months.

About 40% of the job cuts will made among the US sales team, 40% will come from corporate staff, and 20% are the vacancies which will not be filled.

Kraft Foods, which employs 127,000 people worldwide, including 46,500 in North America, said the job reductions will not include the manufacturing plants.

Kraft Foods North America executive vice president and president Tony Vernon said the company's plan for a more nimble company, combined with the current economic and competitive pressures, led to this decision.

"Taking the necessary steps now will enable us to continue investing in our beloved brands to drive growth," Vernon added.

According to BMO Capital Markets analyst Kenneth Zaslow, the cuts are expected to save Kraft $50m, reported the Chicago Tribune.

The job reductions, which represent 3.4% of the company's total workforce, will enable Kraft to move closer to its splitting into two publicly traded companies, which is expected to be completed before the end of this year.

The spinoff will create North American grocery business with $17bn in revenue and a global snack business with $31bn in revenue, and both companies will be based in the Chicago area, while the sites are yet to be finalised.