Dive Brief:
- As part of continued cost-cutting initiatives, Mondelez International has announced plans to change up its North America marketing department, which could mean significant job cuts.
- The new changes will go into effect in early 2016 and will improve effectiveness and efficiency, Mondelez told Ad Age. The company announced a restructuring plan in May 2014 to reduce the company's annual operating costs by at least $1.5 billion by the end of 2018.
- In June, Mondelez began reviewing its global media buying and planning business with plans to consolidate that roster as well.
Dive Insight:
This is the second time this week Mondelez has been in headlines regarding cost-cutting initiatives. The profit margin-boosting measures have been a topic of discussion ever since activist investor Bill Ackman announced his $5.5 billion stake in the company earlier this month. At the time, he also strongly suggested that Mondelez significantly cut costs or sell itself to a competitor.
Another major investor, Nelson Peltz, took his seat on Mondelez's board last year, and soon after, Mondelez instituted a zero-based budgeting policy, which Peltz had admired from the success of 3G Capital's approach to H.J. Heinz Co.
Slimming down marketing could be another cost-cutting option for Mondelez.
"For 2014, the company reported worldwide ad costs of $1.6 billion, or about 4.5% of sales. Mondelez spent $278 million on advertising in the U.S. last year," Ad Age reported.