Kraft Foods Inc. to Cut 1,600 Positions

(Story updated and corrected at 2:06 PM, 1/17/12)

Kraft Foods Inc. says it will cut 1,600 positions in North America this year as it prepares to split its business into two independent companies --- one for groceries, the other for snack foods.

The suburban Chicago-based food company said Tuesday that it plans to eliminate the positions throughout the U.S. and Canada primarily from sales, corporate and other business units. About one fifth of the job eliminations are currently open positions.

Kraft spokesperson Joyce Hodel said the company has not yet made decisions about its manufacturing facilities, so the job cuts will not affect its facility in Champaign. The Champaign plant produces Kraft grocery products, including Kraft Macaroni & Cheese, Miracle Whip and Kraft salad dressings.

However, Kraft does plan to close its management center in the Chicago suburb of Glenview by the end of 2013. In addition, the company will move its Beverages unit and Planter brand to the Chicago area by December 2012. Both units are currently located in other states.

"Making these tough choices is never easy, and we recognize the impact these changes will have on many of our people and their families," according to a statement by Tony Vernon, the executive vice president and president of Kraft Foods North America and CEO of the future grocery company. "But our plan for a more nimble company, combined with the current economic and competitive pressures, led us to this point. Taking the necessary steps now will enable us to continue investing in our beloved brands to drive growth."

The corporation has approximately 127,000 employees across the world, including 46,500 in North America.

Kraft announced in August that it would split its snack and grocery business into two companies - a global snacks business and North American grocery business. Kraft said these moves are needed to help the businesses run more effectively.