Premier Foods, the manufacturer of Hovis, Bisto and Oxo, is to shed 600 jobs as its new management plans to more than double annual cost savings to £40m by the end of 2013.
The jobs are largely expected to go from administrative posts including at its headquarters in St Albans.
Michael Clarke, the former boss of Kraft in the UK who became chief executive last September, said: "While decisions to reduce the workforce are always difficult, I'm convinced we are taking the right steps in the long-term interests of the business, employees and our stakeholders."
Premier is focusing on eight key brands going forward: Hovis, Ambrosia, Mr Kipling, Sharwood's, Loyd Grossman, Bisto, Oxo and Batchelors. It has already sold Quorn, its East Anglian canning business, its Irish brands and the Marks & Spencer ready-meal maker Brookes Avana. The Hartley's jam and Haywards pickles brands are also up for sale with a likely combined price tag of more than £200m.
Premier also warned that although sales over Christmas were in line with its expectations, trading profits for the year are likely to come in at the lower end of forecasts, which had been between £170m and £198m.
But the City welcomed yesterday's news, with Charlie Mills of Credit Suisse describing it as "a message of steely resolve". He has a price target of 8p on the shares which yesterday rose 0.63p to 6.37p.
Premier said it is talking to its banks over a refinancing which it hopes "will be reached soon.
The company is to restart TV advertising for its main brands with Sharwood's and Lloyd Grossman campaigns starting next month.
Mr Clarke plans to more than double marketing spend from just under £20m to £41m this year.Reuse content