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Imperial Tobacco to Cut 6% of Staff

Imperial Tobacco Group said Thursday that it plans to slash its work force by around 6 percent as part of its restructuring plans after its recent takeover of Spanish rival Altadis.

Imperial, Europe's second largest tobacco company, said it will close six of its 58 factories around the world and "reorganize operations at a number of other sites."

The maker of brands including Lambert & Butler, West and Gauloises said the plans are an attempt to address overcapacity and improve efficiencies in a "challenging and highly regulated operating environment."

The restructuring will potentially cut the number of jobs at the enlarged company by around 2,440 from the current 40,000, Imperial said.

Several tobacco manufacturers are cutting jobs and streamlining their businesses as cigarette sales decline in Western European markets amid smoking bans. Britain — a key market for Imperial — became the latest country to ban smoking in enclosed public spaces, including restaurants and pubs, last year and is also considering banning vending machines and requiring shops to stock cigarettes below the counter.

Most of the job cuts will come in France, where Imperial will lose around 1,060 staff, nearly a quarter of that country's work force of 4,700. Its factories in Metz and Strasbourg will be closed.

In Britain, where the company employs 1,700 people, Imperial will shut its historic Bristol cigar factory and restructure its Nottingham plant resulting in a total loss of 285 jobs. The Bristol factory, which has been making tobacco products since 1901, will transfer production to Spain.

In Spain, 830 jobs will be lost out and the Alicante cigarette factory closed. In Germany 250 jobs will go and the Berlin cigarette factory will be shut. In Poland and Russia, 200 and 100 jobs respectively will be cut.

Another 140 jobs will be lost across Belgium, Italy, the Ukraine and Slovakia, where the company's cigar and fine cut tobacco factory will close.

Imperial said it is consulting with unions and employee councils on the plans, and added it would look to offset the job cuts through internal redeployment, early retirement and voluntary redundancy.

"The projects are a necessary step in the process of integrating Imperial Tobacco and Altadis, and will ensure that we create a strong and sustainable future for the enlarged group," said chief executive Gareth Davis.

Imperial bought Altadis last year in a deal worth 12.6 billion euros. It earlier this year made a 4.9 billion pound rights issue to help finance the acquisition, after reporting a 45 percent drop in profit for the first half of the year.