The giant of Richmond’s tobacco industry is trimming back its workforce, including hundreds of local positions.
Locally based Altria Group announced Thursday it will eliminate about 490 salaried employees over the next couple of months, including about 200 to 250 in Richmond.
The cuts are part of what the company calls a “productivity initiative” that is expected to save $300 million annually by the end of 2017.
Some of those savings will be used to reinvest in initiatives for Altria’s family of companies, which includes leading cigarette maker Philip Morris USA, smokeless tobacco producer U.S. Smokeless Tobacco Co., cigar maker John Middleton and tobacco development company NuMark.
Those initiatives include brand building, harm reduction and regulatory capabilities, said Jennifer Hunter, an Altria spokeswoman.
“This productivity initiative is intended to help maintain our companies’ leadership and cost-competitiveness,” Hunter said. “We’re doing this at a time when the businesses had a strong year, and this is about strengthening the capability of our businesses through investment in important initiatives.”
Hunter said Altria CEO Marty Barrington informed employees Thursday morning before a scheduled quarterly earnings conference call.
Employees whose jobs will be eliminated will be informed starting in February and no later than mid-March and will begin leaving the company by the end of March, she said. Hourly employees are not included in the cuts.
The layoffs are Altria’s latest since 2011, when the company cut its salaried workforce by 15 percent. It currently employs about 9,000 salaried and hourly employees across the U.S., including approximately 4,000 in Virginia.
The company reported an increase in smokeable product net revenues for the fourth quarter of 2015 compared to the same quarter the year before. Net revenues were up from $5.51 billion the fourth quarter of 2014 to $5.55 billion last quarter.
Full year net revenues totaled $22.79 billion in 2015, up from $21.93 billion in 2014.