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Kellogg cutting 765 jobs
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December 2, 1998: 11:14 a.m. ET
World's leading cereal maker says move will result in $70M charge
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NEW YORK (CNNfn) - Kellogg Co. said Wednesday it will eliminate 765 jobs and take a pre-tax charge of about $70 million in the current quarter as it focuses on bolstering growth in its ready-to-eat cereal businesses and expansion of convenience food lines.
Battle Creek, Mich.-based Kellogg, the world's largest cereal maker, said it plans to cut roughly 525 salaried positions and 240 contracted positions at its headquarters and across its North American operations.
The company said it expects the layoffs to result in savings of $105 million a year beginning in 1999.
In October, Kellogg said it expected 1998 profits to fall as much as 20 percent below 1997 levels, a downward revision from earlier projections that earnings would slump up to 15 percent below the $1.70 a share recorded in 1997.
Kellogg's cuts underscore the emphasis the company is placing on a realignment strategy under its new president, Carlos Guttierez. The strategy is aimed at reversing, or at least easing, a decline in market share that the company has tried to forestall by heavier investments in category business growth.
"Over the past three months, we have been engaged in aligning our work activities to our growth strategy," Arnold Langbo, Kellogg's chairman and chief executive officer, said Wednesday.
The company said it would provide severance pay, benefits and career counseling to laid-off workers.
Kellogg, with a 32 percent U.S. market share, makes 12 of the leading 15 cereals in the world, including Rice Krispies, Frosted Flakes and Special K. The company reported revenue of $6.8 billion in 1997.
Shares of Kellogg (K) were off 7/8 at 36-7/16 Wednesday.
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Kellogg
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