By Marcus Leach

Premier Foods, the firm whose brands include Mr Kipling and Paxo, have announced that they will sell off non-core businesses and cut about 600 staff in an attempt to double cost savings to £40m a year.

The job cuts will see 5% of the companies payroll made redundant as they look to double their current £20 million cost saving by 2013.

This comes on the back of the news that 2011's results will be a lot lower than previously expected.

"Discussions with the company's banks over a re-financing package continue to make progress and it is anticipated that an appropriate agreement will be reached soon," Michael Clarke, chief executive, said.

"While decisions to reduce the workforce are always difficult, I am convinced we are taking the right steps in the long-term interests of the businesses."

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