Altria to cut jobs due to economic uncertainty
NEW YORK (AP) — Altria Group, the owner of the nation's biggest cigarette maker, confirmed on Tuesday that it has started to cut jobs because of the widespread economic turmoil.
A spokesman declined to say how many cuts would be made but said they were planned for employees of parent company Altria and its cigarette unit, Philip Morris USA. Both are based in Richmond, Va. Altria Group Inc. also owns cigar maker John Middleton and is also buying smokeless tobacco company UST Inc. to pursue growth outside of Cigarettes, which are in less demand from American consumers. Spokesman David Sylvia confirmed that the company is cutting jobs and said it is deciding how many layoffs there will be between now and February. He said departments that would lose employees have been told that there would be cuts. Shares of Altria fell 17 cents to $17.65 in early trading. Altria said in August 2007 that it would cut as many as 400 positions when it moved its headquarters out of New York and spun off Philip Morris International in March of this year. The cuts were designed to save $250 million annually. An undisclosed number of those employees moved to work in the Richmond office. The latest cuts — first reported in the Richmond Times-Dispatch — are in addition to those layoffs. Altria and its subsidiaries employ More than 10,500 people. Tobacco proved to be one of the More resilient sectors during the latest round of quarterly profit reports. Altria's former unit Philip Morris International did especially well since it is positioned to capture growth in emerging markets, where cigarette sales are growing. But when Altria reported results last month, it said the volume of Philip Morris USA's cigarette shipments fell 4.8 percent during the quarter from a year ago. Chief Executive Michael Szymanczyk said then that "because of the economic uncertainties we all face, Altria is taking steps now to continue adding value to shareholders over the long term." Altria also said that because of difficulties in the credit markets its $10.4 billion purchase of UST had become More expensive to finance. The company plans to schedule a shareholder vote in December and hopes to close the deal by the first week of January.