- Kellogg is laying off 108 employees in Atlanta by October, according to the Georgia Department of Labor's website. The company confirmed to Food Dive it is shutting down an Atlanta facility.
- Kellogg spokesperson Kris Bahner told Food Dive in an email the layoffs were anticipated as part of an October 2018 announcement to better position its "Frozen Foods business for success by increasing capacity." There was no external announcement about the layoffs then, but emails Kellogg sent Food Dive indicate the company made an internal announcement last year about the plant closure to stakeholders and employees.
- "We made the difficult decision to close our Atlanta plant, as it does not allow for cost-effective expansion and growth the business. While this decision is the right thing to do for our business, it is never an easy decision to make when people are impacted," Bahner said.
Cuts like these have become the norm for Kellogg and Atlanta is just the latest location to take a hit.
Through its Project K cost-cutting program, Kellogg has been streamlining its organization and cutting jobs across the globe. The goal of the plan was to generate $425 million to $475 million in annual savings by 2018. In 2017, the company changed its distribution method, switching from direct store delivery to warehouse delivery — which resulted in more than 1,100 job cuts. That same year, the company announced its plan to cut 250 employees from its North American business. More than halfway into this year, the company is still ramping up layoffs. Despite all the restructuring, Kellogg has seen only slightly higher revenues.
The company hasn't just been cutting jobs and closing plants. It's been selling off segments of its portfolio. The company sold its Keebler and Famous Amos cookie brands to Ferrero for $1.3 billion in a deal that closed last month. That cash infusion could help pay down debt or reinvest in its existing brands, but it takes time. In June, Kellogg again announced it was cutting 150 jobs in North America, taking a $35 million pretax hit following that sale.
Georgia has seen job cuts from Kellogg before. In 2014, the company cut 325 jobs at its Columbus plant — a former Keebler facility — and shut down the facility in 2015. The closure was a part of Project K. When the company switched its distribution method in 2017, Kellogg laid off 181 employees at an Atlanta distribution center.
The latest round of layoffs were apparently announced to employees late last year. According to the Georgia Department of Labor, 20 workers were cut in April. As the news was announced internally, employees wrote on the job posting website Indeed about the plant closing, complaining of corporate cuts and "low morale because this facility is closing."
Kellogg isn't the only company that has been focusing on cost-cutting in recent years. Many food and beverage companies have been forced to cut food manufacturing jobs to help boost revenue. Companies like TreeHouse, Dean Foods, Coca Cola, General Mills and PepsiCo have slashed jobs and shut down plants in hopes of raising profits.
The strategy may finally be trickling down to help the company's bottom line. In Kellogg's most recent earnings report, net sales from North America — which make up nearly two-thirds of Kellogg's revenue — grew 1% in the second quarter. The North American segment has not seen sales jump by this much since the first quarter of 2013, according to J.P. Morgan analyst Ken Goldman cited by Yahoo Finance.
If the cost-cutting measures continue to marginally bolster Kellogg, then it could help the company get back on track. But Bahner told Food Dive that this latest plant closure would help with "increasing capacity," and it is difficult to see how the company will be able to increase anything as it continues to slash jobs and close plants.