General Mills to cut 850 jobs in cost savings plan
The job losses affect about 2.4% of General Mills’ total workforce, which numbered about 35,000 in 2011. The company did not return a call requesting further details of the layoffs prior to publication.
The maker of Cheerios cereal, Häagen-Dazs ice cream and Green Giant vegetables has struggled with high ingredient costs, and reported flat operating profits in the third quarter of 2012. It said it intends to reinvest savings from the job cuts and other restructuring measures in growth strategies and accelerated innovation across General Mills’ global business platforms.
The company said that total restructuring charges would be about $109m pre-tax, reflecting one-time employee separation expenses and asset-related costs of about $13m. About $94m of these costs will be recorded in the fourth quarter of fiscal 2012, and the rest in fiscal 2013.
The firm discussed growth strategies at the Barclays Capital Americas Select Franchise Conference in London last week. Last Tuesday, General Mills told investors that it was looking to capitalize on the increasing popularity of yogurt in the United States, and that it saw potential for its snacks and cereals segments outside North America, particularly in rapidly growing emerging markets.
Excluding restructuring charges and Yoplait integration costs, the company said it continues to target earnings per share of $2.53 to $2.55 in fiscal 2012. Last week, the company said it expected double-digit sales growth in fiscal 2012.
The company leads the children’s US yogurt segment and in January, General Mills introduced a line of lactose-free yogurt products in order to meet the demands of US consumers, of which around 15% are lactose intolerant. It acquired a 51% controlling interest in Yoplait International last May, which contributed about $1bn in sales in the ten months since the deal.
