Kellogg's To Cut Jobs, Take $35M Pretax Hit On North America Unit Revamp
Kellogg Co said on Tuesday it would cut about 150 jobs and take a $35 million hit to trim its North American operations following the sale of Keebler biscuits and a handful of other brands for $1.3 billion in April.
The announcement, small in scale for a company that employs around 34,000 globally, is a month after similar steps in Europe aimed at streamlining Kellogg's operations and focusing on core businesses.
Kellogg's, like other packaged food companies, has struggled with surging expenses owing to higher transportation and raw material costs, while consumers have shifted to trendier more health-focused upstart brands.
The company's shares lost around 10% of their value last year and are down by more than a third from peaks hit in mid-2016.
"This transaction will result in a smaller, more focused (North American) portfolio with fewer brands... requiring a simpler, more agile and rightsized organization," said Kris Bahner, senior vice president for Global Corporate Affairs.
The Battle Creek, Michigan-based company reported net sales of $13.55 billion in its last fiscal year with adjusted operating profit of $1.88 billion.
The pretax charges include about $20 million of expenses related to employee severance and termination benefits, the company said in a regulatory filing.
It said it expected the restructuring moves in Europe and North America to be completed by end of 2020.