US food group Sara Lee has said that, as part of its cost cutting and reorganisation programme, it will axe 1,689 jobs and register almost US$200m in charges for the quarter ended 30 December.

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In a filing with the US Securities and Exchange Commission, the food and beverage division of Sara Lee announced yesterday (29 January) the closure of its West Point, Mississippi, meat and spice processing facility. The closure is expected to be completed by 30 March and will result in the loss of 1,200 jobs.


Sara Lee said it would take $34m in charges associated with the closure of the pork production and spice plant. Charges related to the 1,200 job losses are yet to be determined, the company added.


Sara Lee also said that it was cutting 489 jobs worldwide over the next 12 months, a move that will see the company register a $40m charge.


In the SEC filing, the company also said it will take a $92m charge in connection with the write-down in the value it has claimed for its Brazilian and Austrian coffee units and a $26m charge connected with the write-down in the value of trademarks owned by the Brazilian unit.

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While it seems likely that Sara Lee hoped to get the bulk of charges associated with its reorganisation efforts over with in this quarter, the company acknowledged that there could be more charges in the pipeline. “As part of the annual impairment review the Corporation also concluded that it was reasonably likely that certain other reporting units may become impaired in future periods… These reporting units include a bakery operation in Europe with $454m of goodwill; a meat business in Mexico with $23m of goodwill and a beverage business in Poland with $63m of goodwill,” Sara Lee said.


Sara Lee shares finished up on the New York Stock Exchange yesterday, rising from an opening value of $17.06 to close at $17.18.