CHICAGO/NEW YORK (Reuters) - Kraft Foods Inc. (NYSE:KFT - News) said on Tuesday it would cut about 6,000 jobs, close 20 plants and pump up marketing as it tries to restore growth in key categories such as cookies.

The largest North American food maker aims to make many of its mainstay foods more appealing to consumers by touting their benefits in terms of popular trends like low-carbohydrate diets. It will tune in to growing markets such as the U.S. Hispanic community, its chief executive said.

The job cuts, which represent nearly 6 percent of Kraft’s global work force, will be taken over a three-year period, including some 1,300 salaried U.S. jobs.

Kraft will initially close plants in Canton, New York; Farmdale, Ohio; and Central Europe. The moves will result in pretax restructuring charges of up to $1.2 billion.

The cost-cutting, which comes amid lower fourth-quarter earnings, aims to save Kraft some $400 million by 2006, money it will reinvest in promotional spending, continuing a plan begun in September to offset weakness in sales. Last year Kraft saw market share slip in part because it overpriced Nabisco cookies, Kraft cheese and other products in a tight economy.

“Every decision we make — whether it’s how we’re organized, who’s on our team, what businesses we’re in or how or where we compete — must answer a critical watershed question: will it help us deliver sustainable growth?” Roger Deromedi said on Tuesday in his first address to Wall Street since taking over as sole chief executive of the company in mid-December.

NEAR-TERM EARNINGS TO SEE PRESSURE

The changes will pressure earnings in 2004, but will ultimately lead to earnings per share growth of 6 percent to 9 percent, results that Deromedi told analysts he hoped to achieve by 2005. The target is down from Kraft’s earlier promise for profit growth of 8 percent to 10 percent.

Kraft, the maker of Oreo cookies, Oscar Mayer meats and Maxwell House coffee, said part of its plan includes altering its portfolio. Items like cookies have been hurt due to healthy eating trends, so in the first quarter the company plans to launch a series of healthier alternatives such as bars with yogurt under its Newtons brands and new varieties of sugar-free SnackWell’s cookies.

“The most important thing is that they appear to have a realistic assessment and I think a more effective strategy and structure,” said David Adelman, a Morgan Stanley analyst. “I think the reality is that there is no quick fix to Kraft’s problems, and this company is not going to be transformed in six months.”

Earlier this month Kraft unveiled a new structure that ties oversight of its five key food categories together on a global basis, rather than under separate regions. It also put former co-CEO Betsy Holden in charge of global marketing.

In an interview with Reuters, Deromedi said the changes had not been pressured by Kraft’s majority shareholder, tobacco holding firm Altria Group Inc. (NYSE:MO - News).

“This was a Kraft plan,” Deromedi said. “It was really us discussing what we needed to do get ourselves onto a sustainable growth track. It’s been under development for many months.”

FOURTH-QUARTER NET SLIPS

Kraft, based in Northfield, Illinois, said fourth-quarter net earnings fell to $869 million, or 50 cents a share, from $931 million, or 54 cents, a year earlier. The results met analysts’ expectations.

Sales rose 6.2 percent to $8.33 billion in the quarter, but much of that increase was due to the weakness of the dollar, which boosts the value of Kraft sales outside the United States. Shipment volume, which factors out currency and price fluctuations, rose only 1.1 percent.

Some analysts were skeptical whether the company could wring much growth out of its business.

“It looks like they’ve really stuck to their original game plan of trying to generate 2 to 3 percent volume growth in categories that I don’t believe you can get this kind of volume growth” from, said Timothy Ramey, an analyst with D.A. Davidson & Co., who rates Kraft shares “underperform.”

Kraft forecast profit for 2004 of $1.63 to $1.70 a share, including 30 cents a share in charges. It expects 3 percent sales growth on a constant-currency basis. Analysts on average had forecast profit of $2.01 a share, before the charges, according to Reuters Research.

For the first quarter, the company forecast profit of 32 cents to 35 cents a share, including 10 cents in charges. Analysts had forecast 47 cents a share before charges.

Shares of Kraft closed down 35 cents to $32.13 in New York Stock Exchange (News - Websites) trading on Tuesday. (Additional reporting by Brad Dorfman in Chicago)