LONDON (SHARECAST) - Premier Foods, the firm behind brands such as Hovis, Sharwood's and Mr. Kipling, said it would cut 5% of its 12,000 strong workforce by 2013.
The cuts form part of a plan to reduce costs by £40m by 2013, more than double the savings envisaged when it was set out in the company's six month report last year.
Investors cheered the announcement, pushing shares up almost 14% in morning trading.
"While decisions to reduce the workforce are always difficult, I'm convinced we are taking the right steps in the long term interests of the business, employees and our stakeholders," said chief executive, Michael Clarke.
Premier is turning its focus onto eight "Power Brands": Hovis, Ambrosia, Mr. Kipling, Sharwood's, Loyd Grossman, Bisto, Oxo and Batchelors.
The group is planning to double marketing spend on these brands in 2012.
Six of the brands will be back on TV with advertising in the first quarter, ahead of a full programme of new product innovation, promotions and marketing throughout the year, the company said.
The group added that it had accelerated the selling off of non-core businesses, completing the sale of its Brookes Avana chilled food business and announcing the agreement to sell its four Irish grocery brands in recent weeks.
Further selected businesses are expected to be divested in 2012, it said.