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Reynolds American Cutting 570 Jobs

Company and its subsidiary R.J. Reynolds Tobacco Co. cutting about 10 percent of their American work force as it restructures its portfolio.

WINSTON-SALEM, N.C. (AP) -- Reynolds American Inc. and its subsidiary R.J. Reynolds Tobacco Co. said Tuesday they were cutting about 10 percent of their American work force as the company restructures its portfolio.

The nation's second-largest tobacco company said it plans to lay off about 570 workers in Winston-Salem, N.C, where the two companies are based, or about 16 percent of the work force there.

The cuts are expected to begin in the third quarter and last through the end of 2009.

The company said it expects to record a $90 million pretax restructuring charge in the third quarter of 2008 because of the efforts.

Meanwhile, Reynolds said it was realigning its brands as it tries to "simplify programs and processes, reduce complexity and improve productivity" throughout the company while focusing on innovation and "maximizing trademark equity."

Among the changes: The company is scaling back marketing and promotional support for its Kool menthol brand cigarettes, while boosting the amount of money it spends on Camel brand menthol products.

"The company believes that Camel's strength provides significant opportunities in the expanding premium-priced menthol category, in which the brand currently has a small but growing position," Reynolds said in a statement.

The Pall Mall label will also remain one of the company's growth brands.

"Continued success demands that we fully align our plans, programs and people behind the things that matter most to our future performance," Daniel M. Delen, chairman, president and chief executive officer of R.J. Reynolds, said in a statement. "The steps we are taking support R.J. Reynolds' ongoing evolution to a 'total tobacco' business model that includes both cigarettes and innovative smokeless tobacco products."

Reynolds shares were unchanged at $51.57 in premarket trading Tuesday.

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