Kraft will be transferring Velveeta cheese production to its Illinois plant

Kraft will be transferring Velveeta cheese production to its Illinois plant

Kraft Foods Group has announced plans to restructure operations at its New Ulm facility in Minnesota, resulting in 80 potential job losses.

A spokesperson for Kraft confirmed to just-food today (1 November) that restructuring will begin in January and continue through to the remainder of next year. The company will be transferring Velveeta cheese production to its Illinois plant.

Kraft will also eliminate its cheese bar line at New Ulm. The spokesperson said the volume it has for the line is not cost-effective enough to be run internally.

"The decision to restructure New Ulm is based on our strategy to realign our processed cheese network to consolidate the same product into fewer plants," the spokesperson said. "That will enable greater efficiencies of scale across our network as we reduce redundant equipment. And with these changes, we can focus our equipment and technology investments more appropriately."

The move includes a US$25m investment in new equipment and infrastructure at the New Ulm plant.

Kraft said the restructure is expected to affect around 80 full-time positions, but that a definite figure has not yet been reached.

"Some jobs will likely be eliminated through normal attrition. And, some employees may elect to retire or resign in exchange for separation benefits. Once we talk with everyone about their future, we'll have a better idea how many people will be affected," the spokesperson said. "We also will eliminate around 10 salaried positions over the next six to 12 months and we think we can handle most of these through attrition."