UK food manufacturer Northern Foods has told just-food that it will cut jobs at top management level as part of its restructuring programme.
A new structure, announced by the firm toda (5 October) will see the firm operate through two divisions: branded and chilled.
Northern’s branded division will comprise Goodfella’s Pizza, McDougalls and Holland’s Pies, Fox’s Biscuits and Matthew Walker Puddings. The company’s chilled arm will combine sandwiches and salads with ready meals and the firm’s British Airways supply business.
A spokesperson for the firm told just-food: “There will be job losses but at the level of management and not on the ground. We expect a decision to be made in the next couple of months but not until the restructuring has been put into place. We cannot say yet how many jobs will go.”
The firm currently employs around 9,500 staff and 500 of those are top management positions.
In the six months ended 2 October, Northern Foods booked a 2.4% drop in group sales.
In Northern’s chilled foods division sales rose 6.3% and in bakery sales increased 3.3%. However, frozen sales slid 23.6%.
“Frozen [sales] dropped mostly due to the Goodfellas relaunch in the first quarter,” the spokesperson said. “Northern Foods stopped promoting for a while and it is a very promotion-driven sector so we expect the second half should be much more reflective of historic trading.”
The spokesperson added that the sale of Dalepak Frozen Foods in August, as well as the exit of its contract with Birds Eye also had an impact.
“The main driver [for frozen sales dip] was that year-on-year we saw an exit of the contract with Birds Eye. There were also other contracts we pulled out of and there was the Goodfellas transition.
“In the first quarter frozen was weak,” the spokesperson added. “In the second quarter frozen started to come back slightly but it is still negative. But it is moving in the right direction. We have made a big investment in Goodfellas to try and deliver in the second half, but clearly there is still a lot to do.”
The firm said its main focus now is on the restructuring of the business.
“The organisational structure is very different in terms of culture and logistics, so this [restructuring] makes more sense…there are more economies of scale that can be shared between the brands,” the spokesperson said.
“When Stefan [Barden, chief executive] came on board it was a very unfocused company and going forward we thought, this is the step that will take the company to the next level. We are now focusing the management on the right areas. It might include job losses but we have been very clear we are looking to take costs out and be more focused on our two key areas.”
Shares in Northern were down 0.55% at 45.50p at 16.08 BST this afternoon.