General Mills announced on Oct.29 another round of job cuts, as it strives to boost its profitability amid lackluster sales. The maker of Cheerios cereal and Betty Crocker cake mixes said it would cut 675 to 725 jobs in its international business over the next year under a new restructuring plan aimed at cutting costs and boosting growth.
The Minneapolis-based company has been struggling with sluggish U.S. cereal and frozen foods sales as consumers shift to perceived fresher, natural and healthier food options. Its U.S. sales for the third quarter actually rose after a reported five straight quarters of decline; however international sales declined in the last two quarters.
The company is in the midst of a multiyear cost-cutting effort. It has announced several plant closures and thousands of job cuts in roughly the past year. In January, it launched an expense-reduction program, and said in a regulatory filing Thursday that it recently broadened the scope of the program "to identify opportunities to streamline our supply chain outside of North America."
Some 285 positions will be eliminated as General Mills closes manufacturing facilities in Berwick, U.K. and East Tamaki, New Zealand. It stated that the job cuts are expected save $45 million-$50 million per year, with about $25 million-$30 million being realized in the year ending May 2016.
Expected to be finalized in the early part of its year ending May 2017, General Mills said the restructuring will also involve shuttering plants in Methuen, Mass., and Lodi in California under another restructuring project, cutting about 680 jobs by the end of fiscal year 2016. The company had about 43,000 employees as of May 2014, of which about half were outside the U.S.
The company is not alone in dealing with flat or slightly lower sales. For more than a year, other big packaged food makers have been cutting costs and jobs, as more consumers shift to less-processed food that they perceive to be healthier.