The Campbell Soup Co. said Tuesday that it would eliminate 770 jobs around the world and shut down its fledgling soup-selling operation in Russia as part of a restructuring plan announced just before a new CEO takes charge of the company.
The cuts and other changes offer hints at which way Denise Morrison may steer the company when she takes over as CEO and president from Douglas Conant on Aug. 1. Morrison was promoted to executive vice president and chief operating officer last year when Conant announced he would leave the company after more than 10 years at the helm. The company's board confirmed last week that she would take over for Conant.
Morrison says she'll unveil a strategic plan at a July 12 analyst meeting.
The job cuts are to include layoffs and are expected to be mostly completed by the end of July. The cuts represent about 4 percent of the company's worldwide workforce of 18,400. The company estimates the cuts will save $60 million over the next year.
The cuts include 130 of the roughly 1,200 positions at the company's headquarters in Camden, N.J.
About 190 positions will be cut as the company outsources much of its U.S. retail merchandising program to Acosta Sales and Marketing, which already contracts with Campbell.
A manufacturing plant in Marshall, Mich., is to be closed as the company shuffles manufacturing operations.
Although one of the company's struggles over the past few years has been how to stem declining sales of soup in the U.S., the restructuring takes aim at efforts abroad.
Morrison visited China and Russia before deciding to pull the company out of Russia.
The company entered both countries four years ago. As the world's two largest soup-eating nations in the world, they offered promise. But they also held risk: In both places, prepackaged soup is a novel idea. Campbell said from the beginning that it wasn't just a matter of getting shoppers to buy Campbell, but to buy into the idea of store-bought soup at all.
Morrison said Tuesday that it wasn't happening fast enough in Russia.
"We believe that opportunities currently under exploration in other emerging markets, notably China, offer stronger prospects for driving profitable growth within an acceptable time frame," she said in a statement.
In one major investment abroad, the company said it would spend about $40 million to automate a biscuit plant in Virginia, Australia.
In after-hours trading, Campbell shares gained 28 cents to $34.02. In the regular session before the announcement, the stock fell 28 cents to $33.74.