990535 Foods Giant ConAgra to Cut Jobs

Omaha, NE - In its second major restructuring move in three years, foods giant ConAgra Inc. plans to cut 7000 jobs and close at least 15 production plants.

ConAgra said it wants to reduce expenses and concentrate on selling its major food brands and other products.

Its 80 independent operating companies need to work more closely together, sharing sales tasks and buying products from each other, the Omaha-based company said.

“Some of our businesses can legitimately claim best-in-industry status, but others have significant room for improvement,” said Bruce Rohde, chairman and chief executive officer.

Analyst David Nelson of CS First Boston said the company had not grown much in the past few years.

“It's a company that's having some problems and it's using this to strengthen” its operations, Nelson said.

ConAgra, whose brands include Healthy Choice, La Choy and Butterball, also will close at least 70 storage, distribution and smaller processing facilities and shed about 20 small non-core businesses. Specific plant and business closings will not be identified until employees are notified, the company said.

Most of the job cuts, including about 4,000 to be announced by May 30, will take place in the next few months, with others coming more than a year away, spokeswoman Lynn Phares said. The majority of workers probably will be laid off while others might find new jobs within the company, she said.

The effort announced Wednesday is broader than a 1996 restructuring that eliminated 6,300 jobs and overhauled 29 plants, because it involves the way ConAgra's businesses work together, Ms. Phares said.

Calling the restructuring plan “Operation Overdrive,” the company also wants to meet its long-standing goal of annual 14% per share revenue growth. Last year, per share revenue grew 1.5%.

The moves will mean a pretax charge of $810 million over the next three years, starting with $420 million in fiscal year 1999's fourth quarter ending May 30, the company said.

ConAgra, which owns businesses ranging from flour milling to frozen foods, said it wants to focus on more efficiently selling all its products, including beef and prepared foods to restaurants and its branded foods in grocery stores.

“It's fair to say this is a company-wide effort,” Ms. Phares said.

The company also will invest about $200 million and create new jobs over the next two years to get full value from its consolidation, Rohde said.

ConAgra employs 83,000 people at about 250 production plants and 1,150 total locations. Its net income last year was $613.2 million, compared with $615 million the year before.

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