NEW YORK - FOODMAKER Kraft Foods said on Monday it is cutting 400 jobs in North America to reduce costs.

Kraft spokesman Renee Zahery said the layoffs will represent a cut of about 1 per cent in the company's North American work force.

Ms Zahery said the layoffs will take place across the board in all areas but will mainly affect employees in its Chicago; Madison, Wisconsin; Tarrytown, New York; East Hanover, New Jersey; and Toronto, Canada offices.

The nation's largest food and beverage maker is in the middle of a three-year transformation that aims to improve sales and profits by lowering costs, launching new products and boosting marketing.

The company has also said it hopes to deliver cost savings of US$1 billion (S$1.47 billion) a year as part of a separate restructuring plan.

Ms Zahery said economic conditions required the company to 'be cost-conscious day in and day out.'

'We looked at eliminating jobs as a last resort,' she said.

She added that all affected employees will be informed by Friday.

Kraft, like most food makers, has had to deal with higher commodity and energy costs.

Kraft, though, has been able to offset much of the increase with higher retail prices. Those price increases helped the company report strong profit and sales growth in its last quarter. -- AP