Cadbury's 'to axe 5,000 jobs'

Confectionery and drinks giant Cadbury Schweppes is believed to be planning to shed more than 5,000 jobs as part of a £300m (€443m) cost-cutting drive, a report said today.

The Dairy Milk maker is expected to announce that around 10% – some 5,000 – of its confectionery business workforce worldwide will be cut when it gives a trading update on Tuesday, according to The Sunday Times.

Cadbury is in the process of separating its confectionery and US-based drinks operations, with rumours of mounting private equity interest in the £8bn (€11.8bn) beverage arm, which makes well known brands such as 7-Up and Dr Pepper.

The reported job cut plans at the confectionery arm are thought to form part of a sweeping restructure of the division, designed to save up to £300m (€443m).

It is also understood some factories are under threat of closure under the radical revamp, although Cadbury declined to comment on the reports today.

Cadbury’s last cost trimming exercise four years ago – called Fuel for Growth - resulted in 30 factories being closed worldwide.

The group now has 35 confectionery sites across Europe, the Middle East and Asia, with another 59 bottling and manufacturing sites across the globe.

Cadbury announced in March that it was to split the business in two and create a focused stand-alone confectionery operation.

The Bournville, Birmingham-based group also aims to generate £250m (€369m) from disposals by the end of the year and most recently sold a batch of businesses, including Canadian-based Allan Candy and its Italian division, Cadbury Italia.

Last year, Cadbury sold its beverages operations in Europe, Syria and South Africa for £1.4bn (€2bn).

Cadbury is facing pressure to save money and improve margins after disappointing analysts with a 9% rise in annual profits in February, hampered by weak margins and the £30m (€44m) cost of a salmonella scare.

Last week the firm pleaded guilty to three offences under food and hygiene regulations in connection with the salmonella scare, which led to the recall of more than a million chocolate bars.