General Mills Inc. will get rid of 850 jobs in an attempt to cut costs and boost productivity as items such as Cheerios cereal, Progresso soups and Hamburger Helper become costlier to make.
The downsizing will affect 2.4% of the Minneapolis company’s workforce of 35,000 people. Including employee severance, General Mills expects $109 million in pretax restructuring charges.
Of that, $94 million will be recorded in the fourth quarter, which ends May 27. The company said the restructuring effort is meant to help “improve organizational effectiveness and focus on key growth strategies.”
General Mills spokeswoman Kristie Foster said that the timing of the layoffs will vary, but that “most individual decisions will be communicated in the coming weeks.” About half of the cuts will come from the Minneapolis headquarters; across the company, administrative and support positions will be most affected.
In March, General Mill said its third-quarter income inched down to $391.5 million, or 58 cents a share, from $392.1 million, or 59 cents a share from the same period a year earlier. Net sales grew 13% to $4.1 billion
The company has recently launched new products such as Greek yogurt parfaits and Dulce de Leche Cheerios while expanding into the fast-growing natural and organic foods category.
“The fact remains that consumers are still cautious, given a slow economy and rising gas prices, so the food-service industry is still facing some head winds,” said John T. Machuzick, the company’s senior vice president of bakeries and food service, in a conference call with analysts in March.