The Quaker Oats Co. announced Friday that 350 to 400 jobs at its Chicago headquarters will be eliminated during the next year due to a reorganization of the grocery division and the spin-off of its Fisher-Price subsidiary.
The jobs, to be cut throughout the Quaker organization, do not include the positions that previously had been eliminated at Fisher-Price in East Aurora, said Ronald G. Bottrell, a Quaker spokesman.
Only a handful of Quaker employees will lose their jobs because the Chicago grocery giant has decided to spin off its toy subsidiary. The lion's share of the job cuts stem from efforts by Quaker management to streamline its grocery business.
About 200 of the positions to be eliminated represent current jobs that are unfilled and the rest will come from further attrition, a spokesman said.
"Fisher-Price represents 15 percent of the Quaker Oats Co., and because of the planned spin-off, Quaker Oats will be 15 percent smaller," Bottrell said, explaining the conglomerate simply won't need as many employees once Fisher-Price is independent.
Quaker has owned Fisher-Price since 1969. Workers in Quaker's Chicago headquarters have provided legal counsel, bookkeeping and a variety of other support services to the largely autonomous toy manufacturer.
William D. Smithburg, chairman of Quaker, also announced that the food company's earnings for the 1990 fiscal year, which ends June 30, will be flat or down slightly from a year ago.
Quaker earned $2.88 per share on sales of $4.9 billion during the last fiscal year. Those figures have been adjusted to exclude results from Fisher-Price, which is no longer included in Quaker's quarterly figures because of the impending spin-off.
Fisher-Price, the world's largest manufacturer of infant and pre-school toys, has seen its profits vanish over the past year because of problems with some new toys and intense competition. The toy maker closed its East Aurora factory Friday, idling the second half of what once was a work force of 450.
Quaker's efforts to shed its non-food operations follow an industry trend to move "back to the basics," analysts say.
The company also announced it will reorganize its largest business, U.S. grocery products, to shift more accountability to key managers, with further decentralization of the marketing research, human resources and financial operations.
In addition, a separate frozen foods division will be created, combining its Aunt Jemima, Celeste and Mini-Meals group, it said.
The restructuring, which takes effect July 1, "will emphasize the need to be more results-oriented," said Philip Marineau, grocery products division executive vice president.