Reynolds American Inc. and subsidiary R.J. Reynolds Tobacco Co., both based in Winston-Salem, said Tuesday they will cut 570 jobs, or 16 percent of their Winston-Salem work force as part of restructuring efforts.
The company said the majority of the job cuts will occur between the third quarter of this year and the end of 2009. Some transitions will extend into 2010.
Last month, Reynolds announced it would completely analyze its business and eliminate jobs not relevant to the company’s future. In an announcement Monday, the company said about 44 of the job cuts were matched with employees who had expressed an interest in leaving the companies.
Reynolds said employees whose jobs are cut will be eligible for outplacement services and severance benefits, which are based on length of service. Severance includes two weeks’ base pay for every year of service, with a minimum of 13 weeks’ pay and a maximum of 78 weeks.
R.J. Reynolds will also scale back marketing and promotions of its Kool menthol brand and increase the marketing budgets for its Camel brand menthol products.
“Continued success demands that we fully align our plans, programs and people behind the things that mater most to our future performance,” Daniel M. Delen, chairman, president and CEO of R.J. Reynolds, said in a statement. “The steps we are taking support R.J. Reynolds’ ongoing evolution to a ‘total tobacco’ business model that includes both cigarettes and innovative smokeless tobacco products.”
Reynolds will also take a $90 million pretax restructuring charge in this year’s third quarter because of the efforts.
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