Cadbury is to cut 580 management and factory jobs, taking the total shed over the past four years by the confectionery firm and its predecessor, Cadbury Schweppes, to more than 14,300.

The latest cuts will be accompanied by "significant numbers" of Cadbury office reception, maintenance, cleaning and other support staff transferring to outsourcing companies in another measure designed to reduce costs.

This year Cadbury's chairman, Roger Carr, told investors that plans to reach a mid-teens operating margin target by 2011 were not radical enough, given the worsening economic climate. He said there would need to be a more ruthless focus on reducing costs.

The board has been under intense pressure to raise its margins, most notably from the US activist investor Nelson Peltz, who has suggested that Cadbury margins lagged way behind competitors such as Hershey's and Wrigley. This gap has since reduced, but pressure on Cadbury remains.

This month Cadbury's finance director, Ken Hanna, announced he was to quit the group, becoming the third boardroom director to depart since the arrival of Carr, who signalled his intention to shake up the management structure soon after his arrival.

In a further sign of his determination to stamp his strategic vision on the business, Carr has changed the regional reporting structure, devolving authority from four global hubs to seven and stripping out 250 senior managerial posts in the process.

A further 330 factory and supply chain jobs are to go in Australia and New Zealand as Cadbury pares down the varieties of sweets and chocolate bars it sells in those markets, simplifying the production process.

Cadbury said it was 60% of the way towards reaching cost-saving targets that were crucial to achieving its goal on margins. It also announced an 8% rise in chewing gum prices in the US.
Sourced from