York says farewell to Smarties and 645 jobs

Nestlé is axing one in four jobs at its Rowntree chocolate factory in York and halving the number of brands made in the city in its biggest shake-up of the iconic plant since the Swiss food giant bought the UK company in 1988.

Its decision to cut 645 jobs at the York site heaps further misery on a city that has already endured more than 1,000 job losses in recent months and seen Kraft close down the Terry's Chocolate Orange site. Nestlé has already cut 234 jobs at its Rowntree site this year.

The Swiss group is cutting the city's ties with some of Britain's best-known chocolate brands, including Smarties, which will be made in Hamburg in the future. Four other brands will disappear from York, including Black Magic and Matchmakers.

In a further insult to York's chocolate heritage, Nestlé plans to sell off the oldest parts of the Victorian factory, putting almost half of the 170-acre site on the market. It will invest £20m of the proceeds on improving the slimmed-down plant, which will remain home to Kit Kats, Yorkies, Aeros, Polos and Milkybars.

Paul Grimwood, the new managing director of Nestlé Rowntree, said the restructuring would "safeguard" the future of the York site, which has been plagued by rumours that it also faced closure, and provide job security for the factory's remaining 1,800 staff.

Union bosses attacked the proposed redundancy plan, which they blamed on a lack of past investment by the Swiss company. John Kirk, the GMB organiser, said: "Nestlé took the profits from the brands year in and year out, and Nestlé themselves failed to invest adequately in the plant and building in York. To use this neglect as the reason to move heritage brands to plants overseas where Nestlé did invest is not acceptable. The move will be fiercely resisted."

Nestlé said it hoped at least half the job losses, which start next year, could be achieved through voluntary redundancy or early retirement.

The losses come a week after Aviva, which owns Norwich Union, announced 450 job cuts in York and follow losses at British Sugar and Terry's. City of York Council said it would seek to attract jobs to the area through initiatives such as Science City York.

There was uproar when Nestlé bought Rowntree, which at the time was the biggest-ever foreign takeover of a British company at £2.5bn. Despite intensive lobbying, the competition regulator waved through the deal.