USA TODAY reports that downsizing at various Kellogg’s facilities across the country could put 1,110 Americans out of work.
Kellogg’s spokesperson Kris Charles said the cereal giant will shift away from direct delivery of its foods to stores, and will instead utilize grocers’ distribution centers. The move will shutter 39 Kellogg’s distribution centers from Maryland to Ohio to New York.
“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,” company spokesperson Kris Charles said, according to CNYCentral.
Charles says each site outfits roughly 30 full-time employees, which means the company could lay off as many as 1,170 workers.
The closures “will not have a sizable impact on any one community,” Charles added.
The move is part of the Michigan-based company’s cost-cutting initiative, Project K, launched in 2013. Kellogg’s reported a loss of $53 million in the fourth quarter, CNBC reports.
The decision to expand its direct store delivery network shows “how serious we are at creating a more competitive and a faster-growing snack business,” said President Paul Norman of Kellogg North America on the company’s investor call Thursday.
“(It’s) a very difficult decision,” Norman added. “We firmly believe this is the right move for our business as we look forward to changing consumer and shopper trends.”