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Reynolds American Layoffs Part of Doing Business

March 16, 2012 |

Reynolds American has a national workforce of 5,400 employees. Over the next two years, it'll restructure its operations and, in the process, lay off more than 500 people.

And some workers at RJ Reynolds Tobacco in Winston-Salem will lose their job. But Wake Forest University Finance and Economics Professor Sherry Jerrell says while layoffs are painful, it's more important to the community for Reynolds American to stay viable.

"Consumers can't generate wealth, they move money from one pocket to another. Governement's can't create wealth, they move money from one pocket to another," explains Jerrell. "Private industry is the only place where they can take in $10 of resources, cost capital and labor and create something that's worth $12."

Reynolds executives say the restructuring will save the company about $70 million by 2015.

In related news, the Centers for Disase Control and Prevention is about to launch a new graphic ad campaign to shock smokers into quitting. It uses sometimes-gruesome stories of people with health problems as a result of using tobacco products.

The agency says the American adult smoking rate hasn't significantly decreased since 2003.

Next Monday, the 54 million-dollar campaign ads will appear in print and billboard and air on TV and radio. They'll run for at least 12 weeks.

The agency hopes to persuade as many as 50,000 Americans to stop smoking.


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