Kraft Foods, the US firm behind brands such as Philadelphia cheese and Ritz crackers, is to cut about 6,000 jobs and close 20 plants around the world.
Plants in the US and Central Europe will be the first targets
Kraft's sales have been hit as shoppers increasingly sought more healthy alternatives to its salty snacks and processed dairy products.
The job cuts, which will affect some 6% of Kraft's global workforce, will be spread over three years.
Some 1,300 US jobs are to go, with the rest distributed around the world.
Kraft has 218 plants, of which 100 are in the US.
In the UK, it has three plants, and a head office in Cheltenham.
Kraft will initially close plants in New York and Ohio, as well as Central Europe.
The eventual aim is to save some $400m by 2006, money which will be invested in marketing products currently seen as underperformers.
Kraft, still the number-one US food company, has lost market share in recent years, at least partly because it has not cut prices to compensate for a slacker market.
The firm is also concerned that venerable products such as Nabisco biscuits and Kraft cheese are perceived as unhealthy and unfashionable.
In the first quarter of this year, the company plans to
launch a series of healthier alternatives such as yoghurt bars and new varieties of sugar-free cookies.