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Battle Creek layoffs: Kellogg to slash 250 jobs

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Gill Hyslop

By Gill Hyslop+

19-Jan-2017

The Kellogg Company has announced it will layoff 250 staff members, mostly from its Battle Creek head quarters. Pic: Kellogg
The Kellogg Company has announced it will layoff 250 staff members, mostly from its Battle Creek head quarters. Pic: Kellogg

Kellogg Company has announced its cutting 250 jobs from its North American operations, which will primarily impact employees at its Battle Creek headquarters.

The snack and cereal giant is the third company to announce layoffs within the past three months in the area – fondly referred to as Cereal City USA.

According to several reports, industry experts have said the cereal industry is facing a decline due to changing consumer tastes towards healthier options and the wider selection of breakfast options available today. 

According to Euromonitor International, against this fierce competition, breakfast cereals struggled to remain relevant in 2015, with retail volume sales falling by 2% to $9.8b.

In November, TreeHouse Foods announced it was cutting approximately 100 of the 160 jobs from its ready-to-eat cereal plant in the Michigan town, beginning in January 2017.

This followed the shift by Post Consumer Brands of some of its cereal production from its Battle Creek site to other facilities.

Cost-cutting initiative

Kellogg told BakeryAndsnacks it was cutting jobs as part of Project K, launched in November 2013.

“Kellogg Company announced changes to its North American business as part of Project K, a four-year global effort to fuel growth through greater efficiency and effectiveness,” a company spokesperson said.

“The changes focused on eliminating work that doesn’t drive the highest returns; driving speed and agility across the organization by removing duplication of work between global, regional and business unit teams in North America; and creating a more focused, efficient organization by increasing spans of control and decreasing organizational layers.”

The goal is to generate between $425m-$475m in annual savings by 2018, the company told investors on its website.

It stated that it wanted to become “more efficient and effective to meet the needs of the people who buy our foods,” which it hopes to do by “eliminating work that doesn't drive the highest returns.”

The job cuts are expected to take place over the next several months, starting by the end of January.

The  manufacturer of Rice Krispies, Special K, Pop-Tarts and Pringles, as well as Eggo frozen waffles, said it was working to help affected employees with severance packages and outplacement services.

The $26.5bn company will issue its 2016 fourth quarter and full-year financial results on February 9.

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