ConAgra Foods, Inc. has announced in a press release a restructuring plan that will realize at least $300 million of efficiency benefits within the next three years through a combination of reductions in SG&A and enhancements in the company's trade spend processes and tools.
The company will cut about 30 percent of its total global office-based workforce, or approximately 1,500 jobs as part of the restructuring plan.
ConAgra said in the press release that it expects to achieve a cost savings of about $200 million coming from a combination of lower headcount, aggressively embracing a zero-based budgeting, simplifying its organizational structure, and outsourcing technology and back office functions.
The company also expects the enhancements in its trade spend processes and tools will bring about $100 million in efficiency benefits.
ConAgra adds that positions in its plant will not be part of the approximately 1,500 job cuts it will implement as part of the restructuring plan, according to the press release.
The company expects to incur total non-recurring charges of about $345 million in cash over the next three years in connection with the restructuring.
Reuters adds that the job cut is the latest move implemented by Sean Connolly, CEO of ConAgra, who joined the company in April.
The company will also be divesting its struggling private-label business, which it announced in June.
Connolly told Reuters in an interview that change is needed in the company.
"While we believe that we can create a lot of value with ConAgra Foods, that's only going to happen if we make a bold change, and we're going to continue to push for change," he said.
The company will also be relocating its headquarters to Chicago, Illinois, beginning in the summer of 2016, according to the press release.
Approximately 700 employees will be relocated in the new offices, including the company's senior leadership team and certain functions of the Consumer Foods business.
ConAgra adds in the press release that about 1,200 employees within key administrative functions, such as research and development, and supply chain management, will remain in Omaha, Nebraska.
The company wants to maintain a significant presence in Omaha.
