Kellogg to Cut Global Workforce by 7% to Trim Costs

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Kellogg Co. of Battle Creek will cut its global workforce by 7 percent over the next four years as part of a global efficiency program to trim costs.  

“We are excited by the potential and opportunities we see for growth in the categories in which we operate,” says John Bryant, president and CEO of Kellogg. “As a result, 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.”

The company expects to invest $1.2 billion to $1.4 billion in the program, which will consolidate facilities and eliminate excess capacity. In return, Kellogg expects to save between $425 million to $475 million on an annual basis by 2018.

The program, called Project K, will reshape the company’s cost structure and serve as a catalyst for its growth structure, says Kris Charles, a Kellogg spokeswoman. “Through Project K we will identify significant cost savings which we will invest in increased brand building to stabilize our core cereal business in key developed markets, as well as in emerging markets and capabilities,” she says.

In an effort to develop a more global structure, the company will support the “creation of global category teams — one for global breakfast offerings, the other for global snacks,” Charles says. The category teams are responsible for developing long-term, global strategies for their respective sectors while focusing on big, scalable ideas that can be leveraged worldwide.

For the third quarter, Kellogg reported net sales of $3.7 billion. The company earned $326 million, or $0.90 per share, up from $0.89 a year ago. 

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