ConAgra to Cut 7,000 Jobs in Restructuring Plan

ConAgra Inc. (Omaha) will cut 7,000 jobs and close at least 15 production plants to reduce expenses and concentrate on selling its major food brands and other products. The company 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.

Calling the restructuring plan ''Operation Overdrive,'' the company wants its 80 independent operating companies to work more closely together, sharing sales tasks and buying products from each other, said spokeswoman Lynn Phares. The company also wants to meet its longstanding goal of annual 14% per share revenue growth. Last year, per share revenue grew 1.5%.

According to Phares, most of the job cuts, including about 4,000 by May 30, will be made in the next few months, with others coming more than a year away.

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. The company also intends to modify how it sources ingredients and other raw materials.

This initiative—which the company calls "Strategic Sourcing"—is aimed at making ConAgra a more efficient customer. The company is presently implementing strategic sourcing actions in more than a dozen procurement categories involving purchasing from external sources.

ConAgra also intends to source internally an additional $1 billion of goods and services previously procured externally. Internal sourcing will keep more profit margin inside ConAgra and enable source businesses to use capacity more efficiently and profitably.

"Our strategic sourcing opportunity is huge," said Bruce Rohde, chairman and CEO. "We conservatively estimate that ConAgra will achieve at least $250 million per year in sustainable savings and profit leverage within three years."