Reynolds American to Cut 570 Jobs, Refocus Brands

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Reynolds American to Cut 570 Jobs, Refocus Brands

WINSTON-SALEM, N.C. -- In an effort to boost growth in a declining cigarette market, Reynolds American Inc. (RAI), parent company to R.J. Reynolds Tobacco Co. (RJRT), will cut approximately 570 full-time jobs and change its focus on one of its cigarette brands.

The company will streamline non-core business programs to allocate resources to strategic growth initiatives, it said in a statement.

The job cuts, representing approximately 10 percent of RAI’s U.S. employees, does not include employees of Conwood, Santa Fe Natural Tobacco Co., or production associates and trade marketing personnel for RJRT, the company stated.

"The field sales organization and trade marketing positions outside of Winston-Salem were not part of the analysis at all," RAI spokeswoman Maura Payne told CSNews Online. "They are excluded from the job eliminations, which all are in Winston-Salem, N.C. The cuts run the gamut—every dept was analyzed, every job was reviewed."

The cuts will generate about $100 million in savings by the end of 2010, with annual savings of about $55 million thereafter, the company stated. The majority of job eliminations will occur between the third quarter of 2008 and the end of 2009, with a few transitions extending into 2010.

In addition RJRT will refocus its investment in the premium menthol category to the Camel brand, which is primarily known for its non-menthol styles, according to the company. Camel’s strength provides "significant opportunities in the expanding premium-priced menthol category, in which the brand currently has a small but growing position," the company stated.

Over time, retail locations will see greater emphasis on the Camel menthol brand, said Payne, who added that depending on geographic location, the company will continue to support its other menthol brand, Kool, where it is a strong brand.

Moreover, the company is moving Kool from its growth brands, which also includes Camel and Pall Mall, to its "support" brands, such as Winston, Salem, Doral and others, which receive a lower level of marketing and sales support, Payne told CSNews Online.