ConAgra Foods to cut 1,500 jobs, move its HQ from Omaha to Chicago

By Elaine Watson contact

- Last updated on GMT

ConAgra CEO Sean Connolly: Cost savings will 'provide fuel for brand-building and innovation initiatives'
ConAgra CEO Sean Connolly: Cost savings will 'provide fuel for brand-building and innovation initiatives'

Related tags: Meal

ConAgra Foods will cut about 1,500 jobs, around 30% of its office-based workforce, and move its headquarters to from Omaha, Nebraska, to Chicago as part of a plan designed to deliver $300m in cost savings over the next three years.

The moves are designed “to enhance the company's cost-competitiveness, margins and agility, while also providing fuel for future brand-building and innovation initiatives​,” said the company on Thursday.

“Cost savings of approximately $200m are expected to be derived from a combination of lower headcount and non-headcount costs which will be achieved by aggressively embracing zero-based budgeting, simplifying organizational structure by increasing spans of control and reducing layers, and outsourcing technology and back office functions to improve scalability.

“Additionally, the company expects to realize approximately $100m of efficiency benefits from enhancements to trade spend processes and tools.”

The HQ move will begin in the summer of 2016, when around 700 employees will be based in new offices in Chicago’s Merchandise Mart, including the company’s senior leadership team, said ConAgra, although it will “continue to maintain a significant presence in Omaha, including approximately 1,200 employees within key administrative functions, as well as R&D and supply chain management”.

Sean Connolly: ‘We want to compete on dimensions other than price’

ConAgra Foods has made significant changes since bringing on new CEO Sean Connolly in April, most notably announcing plans to divest its private label business less than three years after buying it via a $5bn mega-deal to acquire Ralcorp.

Connolly, who said the firm had pumped too much time and money into the private label business, and was not seeing a good return, said M&A activity to reshape the portfolio at ConAgra - which recently acquired natural and organic frozen meal maker Blake’s All Natural Foods - was also on the cards. 

Speaking on the firm’s second quarter earnings call on September 22, Connolly said ConAgra had relied too heavily on trade spending in the past and is now “clearly committed to a different approach”.

He added: “We want to build brand strength, we want to compete on dimensions other than price, we want to get our margins up, we want our brand health up, but we are going to pursue all that in a surgical way.”

Related topics: Ingredients

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