Tags: Reynolds | Work | force | Cigarette | cut

Reynolds American to Cut Work Force by 10% as Cigarette Demand Falls

Wednesday, 14 March 2012 11:32 AM

Reynolds American Inc., the second- largest U.S. tobacco company, plans to eliminate 10 percent of its U.S. work force, or about 540 jobs, in the next three years as demand for cigarettes slumps.

The reductions, including salaried and hourly positions, will result in a pretax restructuring charge of about $110 million in the first-quarter for severance, benefits and related costs, Winston-Salem, North Carolina-based Reynolds said in a statement. As of Dec. 31, it had about 5,400 workers.

The job cuts will enable Chief Executive Officer Daniel Delen to reduce annual costs by $25 million this year and $70 million a year in 2015. Reynolds’ share of U.S. cigarette sales slipped to 27 percent in the fourth quarter, down 1.1 percentage points from a year earlier, as shipments tumbled 7.4 percent.

Most of the departures of employees are voluntary, Reynolds said.

Four brands gained market share last year, including Camel, Pall Mall, American Natural Spirit cigarettes and Grizzly snuff, the company said last month.

By revenue, Reynolds trails Altria Group Inc., the maker of top-selling Marlboro cigarettes.

Reynolds slipped 0.9 percent to $41.48 at 9:45 a.m. in New York. The shares had advanced 1.1 percent this year before today.

© Copyright 2018 Bloomberg News. All rights reserved.

1Like our page
Wednesday, 14 March 2012 11:32 AM
Newsmax Media, Inc.

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved