Dive Brief:
- Kellogg Co. is eliminating 250 jobs from its North American business as part of Project K, a strategic initiative aimed at fueling growth through better efficiency and effectiveness, according to Food Business News.
- The planned four-year initiative is expected to generate between $425 million and $475 million of annual cost-savings by next year.
- A majority of those losing their jobs currently work at its headquarters in Battle Creek, MI.
Dive Insight:
Donald Trump may soon be tweeting his displeasure at Kellogg. After all, the new president has given similar treatment to other major companies who have cut U.S.-based jobs or talked of moving them to other countries.
Whether Kellogg will shift responsibility to existing employees or hire cheaper temporary workers is unknown. It's still not known which segments of the company this layoff will impact. And why job cuts are necessary is also murky. Kellogg posted 42% growth in its third-quarter profits — mostly due to lower costs and a favorable tax rate. The area where the manufacturer fared poorly was in sales, which declined by 2.2% to $3.25 billion. This mostly came from a drop in the morning foods segment.
For its part, Kellogg is working to soften the announcement by tying it to a strategic plan to improve sustainability and grow the company more efficiently. This is a strategy that has helped Kraft Heinz and Hostess see increases over the last year. While unpopular at first, the long-term effects can be beneficial for the larger company and its employees.