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Kellogg Announces Major Job Cuts, Facility Closures, Sales Forecast Slashed

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Kellogg Company, the nation’s largest breakfast cereal manufacturer, is again announcing major cut backs and has slashed its sales forecast as profits continue to fall.

On February 9 the Michigan-based company cut its sales projections for the year after experiencing another quarterly decline.

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The company imagined it would have flat sales but instead found a two percent decline.

“For the quarter ended Dec. 31, Kellogg reported a loss of $53 million, or 15 cents per share,” the Associated Press reported on Thursday. “Not including one-time items, it said it earned 92 cents per share. Analysts expected a profit of 85 cents per share. Total sales were $3.1 billion, slightly better than expected revenue of $3.07 billion.”

But that wasn’t the only cuts Kellogg Co. reported this week. The company also told investors and employees that big cuts in facilities and workers are coming.

On Wednesday the company announced it was closing a large number of distribution centers across the U.S. and that layoffs would result, WKBN reported.

Some insiders have said Kellogg’s is looking to cut sales representatives, merchandisers, and shuttering as many as 39 distribution centers.

Kellogg spokesman Kris Charles released a statement saying the move is a “difficult decision.”

While this is the right move for the company to achieve our long-term objectives, it was a difficult decision because of its impact on employees. On average, our distribution centers employ approximately 30 full-time workers.

As the distribution shifts from our network to our retailers’ networks, so too will the work. We’ve been actively engaged in conversations with some of our biggest retail partners who have expressed strong interest in hiring these employees for high-demand roles once the transition is complete. As a result, we are optimistic that our employees will find similar employment once this transition is complete so the net impact is impossible to quantify. As the affected employees work throughout the U.S., this change will not have a sizable impact on any one community.”

The closures and layoffs are to be completed by the fourth quarter of this year, the company said.

John Bryant, Kellogg Company Chairman, and CEO, said that the “retail landscape continues to change” and Kellogg has to keep up with that shift. “We have to change the way we reach and communicate with consumers. Because our customers’ and our own warehouse distribution systems have become more efficient and effective, we can now redeploy resources previously tied to DSD and direct them to the kinds of brand investments that drive greater demand with today’s consumers − ultimately growing our business and our retailers’ businesses,” he said.

This latest move is on top of the major cuts already announced this year. Early in January Kellogg Co. announced it was firing 250 workers.

The continued moves to scale back the company comes after Kellogg’s decided to cut its advertising with Breitbart News at the end of 2016, thereby snubbing Breitbart’s 45,000,000 readers.

In November, Kellogg’s noted that Breitbart News’s conservative readers are not “aligned with our values as a company.”

While the decision by Kellogg’s to cease advertising made virtually no revenue impact on Breitbart.com., it did represent an escalation in the war by companies like Target and Allstate against conservative customers whose values propelled Donald Trump into the White House.

Follow Warner Todd Huston on Twitter @warnerthuston or email the author at igcolonel@hotmail.com.


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