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RJR Cutting 700 Jobs in Wake of Smokeless Cigarette’s Failure

March 22, 1989

WINSTON-SALEM, N.C. (AP) _ R.J. Reynolds Tobacco USA said Tuesday it plans to cut about 700 jobs connected with the so-called smokeless cigarette that was abandoned after failing market tests.

The hourly workers, whom the company would have used in the production of its Premier brand, will be offered early retirement enhancements or cash incentives to leave voluntarily.

RJR President Ralph Angiuoli said the cuts were made because of the ″impact of the brand’s reduced production requirements.″

The tobacco giant scrapped plans for Premier last month after the cigarettes were poorly received in test markets in Missouri and Arizona.

The cigarette replaced burning tobacco with a high-tech flavor capsule warmed by a carbon heat source at the tip. It virtually eliminated side smoke but smokers said the brand tasted and smelled bad.

Angiuoli said RJR had planned to transfer workers to Premier if the brand had succeeded.

About 150 employees will be eligible for early retirement with enhanced pension benefits under the cutback program. Those workers also will receive full pay and benefits for a period based on their total years of service.

Regular hourly workers who agree to leave will receive full pay and benefits until the end of the year and a $15,000 bonus. Temporary employees will receive benefits until the year’s end and a $5,000 cash payment.

If more than 550 regular and temporary employees apply for the program, eligibility will be determined by seniority.

RJR’s 6,900 hourly production workers have until midnight April 10 to notify the company if they are interested.

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