ITG Brands LLC confirmed Monday its third round of job cuts for 2019, although it stressed the latest cut is the smallest.
Most tobacco manufacturers have a significant percentage of their workforce servicing retail and wholesale customers across the United States.
“The net impact of the job loss is low double digits, which, for an organization our size, are job losses essentially close to the number of new hires,” spokesman Mark Smith said.
Smith said the latest workforce reduction is another part of an organizational restructuring that is reducing the size of its production and sales units by at least 100 each.
“We have created an ITG Brands’ national accounts team and redefined our trade customer marketing group,” Smith said. “We also have created a new area sales structure. To strengthen our field sales team, we are integrating the Fontem (makers of blu E-cigs) sales force with the ITG Brands sales force. This is maximizing our ability to sell the entire portfolio with one point of contact in the field. We are also redesigning our sales areas, regions and divisions.”
The restructuring will result in some field sales roles being eliminated and others created, Smith said.
“This will impact a number of our sales force employees, who will either need to apply for a new role in a new territory or exit the business,” Smith said. “The newly created vacant territories that are not filled by existing employees will be filled by new hires.”
ITG said Oct. 29 that it has offered a voluntary separation program to sales employees outside Greensboro, with more than 100 accepting.
The workforce reduction comes after ITG told the N.C. Commerce Department on Oct. 17 that it had made official plans to end production at its Reidsville cigarette-manufacturing plant by Dec. 31, effectively eliminating 110 jobs.
The production shift appeared inevitable after Reynolds American Inc.’s plans to buy Lorillard Inc. surfaced in July 2014. Reynolds completed the $29.25 billion deal in June 2015.
The companies sold Reynolds’ cigarette brands Kool, Salem and Winston, and the Lorillard cigarette brand of Maverick and its blu eCig brand to then-Imperial Tobacco Group Ltd. for $7.1 billion to ease regulatory concerns about competition and help Reynolds pay for the overall deal.
Since the sale, at least 375 ITG production jobs have been eliminated.
As of Oct. 17, ITG’s Greensboro workforce has shrunk from 1,700 to 925. Production workers, who numbered 1,100 before the sale and 675 afterward, were hit hardest.
At that time, ITG had 859 sales and marketing employees across the country and 22 at its leaf-processing plant in Danville, Va.
“We are growing market share and have just completed a very successful fiscal year,” Smith said Oct. 29.
According to the latest Nielsen convenience-store data as of Nov. 2, ITG’s market share was at 7.3%, including 2.1% from Winston and 1.7% from Kool and 1.6% from Maverick. ITG has said its market share is closer to 10%.
“We are building on that performance by making sure we have the right organization in place,” Smith said.
Though field sales employees were the focus of the voluntary buyouts, the initiative covered all company functions, including at its Greensboro headquarters. There are plans to fill some job vacancies.
ITG announced Nov. 1, 2018, it would close the Reidsville plant at 301 N. Scales St. by April 2020.
The manufacturer said in its WARN notice that it would begin shutting down operations on Dec. 19 and that 102 jobs would be eliminated Dec. 31 and the rest by Feb. 27.
ITG said displaced hourly employees will receive a severance package. It has established a benefits plan for salaried employees affected by the closing. The hourly workers are represented by Local 192T of the Bakery, Confectionary, Tobacco Workers’ & Grain Millers International Union.
Smith said ITG is investing $70 million in new high-speed equipment at the Greensboro facility, “which indicates how we feel about the future.”