Nabisco Will Restructure; Work Force to Be Cut by 6%

Nabisco Holdings Corp. on Monday unveiled a sweeping restructuring that includes shutting some plants and warehouses, firing about 3,100 workers and sharply hiking promotional spending.

The nation’s largest maker of cookies and crackers said it plans to take a second-quarter restructuring charge of about $268 million, or three times estimated earnings, and take another pretax charge of $118 million over the next year as it reduces its work force by 6%.

Chief Executive James Kilts said he’ll use the $100 million in annual savings to boost advertising spending by about 30% to try to regain sales lost to rival Keebler Foods Co. of Elmhurst, Ill.

In addition, Parsippany, N.J.-based Nabisco is undergoing an 18-month-old effort to overhaul its sales and distribution system.

The restructuring is Nabisco’s second since June 1996, costing more than $1 billion in pretax charges against earnings. The company cut its work force by 8% in the 1996 restructuring.

Industry analysts said Nabisco’s plan did not appear to be a prelude to a long-expected spinoff of the maker of Oreo cookies and Ritz crackers by its parent, RJR Nabisco Holdings Corp.

RJR owns 80% of Nabisco, and Wall Street has expected that RJR eventually would spin off its remaining stake in the company.

RJR said in a separate statement that, as a result of Nabisco’s restructuring, its own 1998 earnings will include an after-tax charge of $216 million, to be reflected in its second-quarter results. RJR also said it would record $56 million in restructuring-related expenses from Nabisco’s program over 12 months.

RJR’s net earnings in the first quarter were $179 million, or 52 cents per share, on revenue of $3.9 billion.

Nabisco shares fell $6.06 to close at $39.88, and RJR shares were off $1.63 at $26.50. Both trade on the New York Stock Exchange.

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Bloomberg News and Reuters were used in compiling this report.