Kellogg's Cost-Savings Program Cuts Global Workforce

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In November 2013, American-based multinational food manufacture Kellogg Company—best known for products like Frosted Flakes and Pop Tarts—announced that it would be downsizing its workforce by 7 percent.

According to Forbes, Kellogg’s goal is to develop an annual savings plan that will run between $425 million and $475 million by 2018.

The corporation stated that the decision was part of a global cost-savings program called “Project K,” which will be in effect for the next four years.

Not only are corporate jobs being cut, but also positions within the company’s supply-chain infrastructures. Kellogg says that it hopes to “improve efficiency and margins” by reducing the capacity within various chain locations. 

One plant that is witnessing a sudden decrease in workers is the London-based location.

The operation had already cut 15 jobs over the summer, but on Friday September 12, the plant lost an additional 300 workers to job-cuts. Most of the workers were noted as production line operators for products like Special K and Froot Loops.

The London plant first informed their employees in December 2013 that they would be shutting down the establishment after 106 years. Now, more than 150 workers remain at the location until it closes at the end of this year. 

President Bob Martin of the Confectionery Tobacco Workers and Grain Millers Union says that the circumstances are not ideal for anyone at the plant—especially since most workers do not look forward to losing a $20 an hour salary. 

“The last few months has been a roller-coaster of emotion,” Martin told The London Free Press. “They are not thrilled to be going, but it’s time to go.”

Another plant will also witness a job-cut starting in November. 

The Charlotte, North Carolina location in the United States looks forward to downsizing its employment department.

The massive bakery is best known for its production of cookies and sweet snacks including Famous Amos, Austin Sandwich Cremes, and Iced Animals.

Workers at the cookie plant were notified in February that Kellogg was going to throw out 161 jobs as it comes to a closing by late 2014.

Although Kellogg’s revenue shares continue to do better than other competitors like General Mills, the company experienced a revenue decline in U.S. products last year: 

  •     Snack Foods decreased by 2.5 percent ($886 million); breakfast foods by 2.2 percent ($883 million).
  •     2012’s net income was $993 million; 2013 net income $989 million
  •     Free cash flow from 2012-2013 fell from $1.03 billion to $87 million

“[We] are making the difficult decisions necessary to address structural cost-saving opportunities which will enable us to increase investment in our core markets and in opportunities for future growth,” Kellogg CEO John Bryant told Forbes in 2013. “The marketplace is constantly changing and evolving and we must adapt.”

For a few London-based workers, their disgust with the company’s new decision has created fear of not finding a stable job and income following termination.

“We are very mindful of the impact these changes will have – particularly to our employees,” Bryant previously stated in December’s news release. “As our employees and others would expect from Kellogg, we will help those who are impacted through their transitions.”

The company plans to further close down plant locations in Australia and Canada.