Campbell Streamlines Manufacturing Operations, Cuts Hundreds of Jobs to Invest in Growth

By Moon Harper

May 30, 2024 12:52 AM EDT

Campbell's Soup on Tuesday announced plans to restructure by downsizing its major facilities, which will result in the elimination of hundreds of jobs.

Campbell's Extensive Restructuring

The FMCG company, known for brands like Campbell's Soup, Goldcrackers, and V8 juices, plans to downsize its Jeffersonville, Indiana facility and shut down its Tualatin, Oregon site, in a move that is expected to result in the loss of up to 415 jobs, according to Reuters.

The changes will happen gradually, with Campbell's Soup expected to reduce its workforce by more than a third, with 120 out of 330 employees leaving by August, while production in Oregon will cease entirely by July 2026. Meanwhile, the Indiana factory will now focus on making tortilla chips. At the same time, the production of kettle crisps will shift to the Charlotte plant in North Carolina and the Hanover plant in Pennsylvania, resulting in 85 job losses out of the current 230 workers. In July of last year, the company revealed intentions to increase Goldfish crackers production at its Richmond, Utah plant, with operations projected to commence by the end of 2024.

Focusing on Newer and More Efficient Facilities

Campbell also announced plans to invest approximately $230 million in capital investments through fiscal 2026, focusing on newer, more adaptable, and efficient facilities within its network. This initiative is anticipated to generate 210 new jobs across the company.

Despite having approximately 14,500 employees as of July 30 last year, the company's shares experienced a 2% decline in morning trade.

The Sovos Brand Acquisition

These changes coincide with Campbell's meals and beverages division finalizing its £2.1 billion ($2.7 billion) acquisition of Sovos Brands in March, following approval from the Federal Trade Commission.

Sovos Brands' portfolio comprises pasta sauces, dry pasta, soups, frozen entrees, frozen pizza, and yogurts sold under Rao's, Michael Angelo's, and Noosa. In the year ended December 30, 2023, Sovos Brands achieved net sales of $1 billion, with a remarkable 25% year-over-year increase in organic net sales. Rao's experienced a particularly strong performance, with organic net sales surging by 37%, resulting in $775 million in annual revenue.

A Significant Milestone for Campbell Soup

Mark Clouse, the president and chief executive officer of Campbell Soup, based in Camden, remarked that the acquisition represents a significant milestone in Campbell's history. It introduces multiple market-leading premium brands to the company, accelerating Campbell's successful strategy and setting the stage for sustained profitable growth. Clouse highlighted the strengthened Meals & Beverages division alongside the distinct Snacks division, which collectively form an advantageous portfolio, positioning Campbell as one of the most dependable and growth-oriented large-cap names in the food industry.

Campbell Soup anticipates that the transaction will increase adjusted diluted earnings per share by the second year of owning Sovos, excluding one-time integration expenses and synergy costs. It is expected to achieve annualized cost synergies of $50 million within the next two years.