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UPDATE 1-Reynolds American to cut 10 pct of U.S. workforce
March 14, 2012 / 12:57 PM / 6 years ago

UPDATE 1-Reynolds American to cut 10 pct of U.S. workforce

* Job cuts to be completed by 2014

* Sees $110 million in severance costs

March 14 (Reuters) - Cigarette maker Reynolds American Inc said it will reduce its U.S. workforce by 10 percent by the end of 2014, as it looks to cut costs to sustain profit growth.

Reynolds American, which makes Camel and Pall Mall branded cigarettes, expects to incur a pretax restructuring charge of about $110 million related to the job cuts in the first quarter.

By the end of this year, the company expects savings of $25 million from the move, an amount that will increase to about $70 million annually from 2015.

The job cuts come after Reynolds American and some of its operating companies like R.J. Reynolds Tobacco Co and RAI Services Co completed a three-month long business analysis.

A majority of the people are leaving the companies on a voluntary basis, Reynolds American said in a statement.

The company’s shares closed at $41.86 on Tuesday on the New York Stock Exchange.

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