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Reynolds American says There's Another Side to Reducing Workforce

March 15, 2012 |

A reduction in Reynolds American Incorporated's U.S. work force may help other workers down the road.

By 2014, Reynolds American Incorporated says it'll cut 10% of its employees across its many holdings. Nationwide, the corporation employs 5,400 people. The reduction is in response to a three-month business analysis on how to keep the company competitive.

The new cuts are expected to generate about $25 million of savings by the end of this year - and about $70 million by the end of 2015. Spokesman David Howard says some workers will be laid off, and others are taking early retirement. This also means job cuts at R.J. Reynolds Tobacco in Winston-Salem.

Howard would not specify how many positions will be eliminated but confirms it includes salaried and hourly workers. But he says, "Due to the number of volunteers, we will actually rehiring for some positions in the future."

According to Howard, early retirees and laid off workers will get a severence package including two weeks of pay for every year of service up to 78-weeks. The company will also cover half the cost of COBRA medical insurance for 6 months.

Meanwhile, President of Winston-Salem Chamber of Commerce Gayle Anderson doesn't believe these layoffs will have an adverse impact on the city's economy. "Most likely the majority of those folks will take early retirement so they will not be in the workforce. We'll certainly be prepared to help those who want to start a business or find other employment. But I think it will be a negligible impact."

R..J Reynolds Tobacco is maker of Camel, Salem and other brands.


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