Premier Foods has announced plans to slash 600 jobs amidst warnings of weaker profits. The heavily indebted company, which owns Mr Kipling cakes, Hovis, Oxo and Bisto gravy, is seeking to shave £40 million from its costs each year until 2013.

The job losses represent 5 per cent of Premier’s workforce. The company said it would use the savings to double spending on marketing its eight “power brands”, including Ambrosia, Sharwood's and Hovis.

Following the sale of its Quorn vegetarian foods range, Premier is also expected to sell off more if its current brands, including Hartley’s jams, in a bid to ease the burden of debt, which currently stand at £850 million. The group has seen its market share decrease as consumers increasingly opt for supermarket own brand alternatives.

Late last year, The Guardian reported that, whilst directors in FTSE 250 companies such as Premier Foods made 3 per cent more in 2011, they enjoyed bonuses which leapt from 54 per cent of maximum in 2010 to 86 per cent. Their workers’ pay was shown to be lagging behind inflation, suggesting a further widening of the pay gap.