General Mills said in a statement on Tuesday, May 22, 2012 they will be cutting 850 jobs as part of a plan to lower cost and boost efficiency. The Golden Valley-based company employs 35,000 workers worldwide, about 5,500 in Minnesota.
General Mills spokeswoman Kristie Foster said that the timing of the 850 job cuts will vary, but that “most individual decisions will be communicated in the coming weeks.” About half of the job cuts will come from the Minneapolis headquarters; across the company, administrative and support positions will be most affected.
Plans include asset-related costs of approximately $13 million pre-tax associated with the write-down of selected production equipment. The new plan for General Mills includes organizational changes that strengthen business alignment, and actions to accelerate administrative efficiencies across the company to focus on key growth strategies.
The job cuts will affect 2.4% of the Minneapolis company’s workforce of 35,000 people. Including employee severance and asset related costs, General Mills expects $109 million in pretax restructuring charges including $94 million in the fourth quarter ending on May 27, 2012.
In March, General Mill said its third-quarter income was 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. Nineteen analysts estimate earnings of $2.54 per share for the full year for General Mills.
John T. Machuzick, the company’s senior vice president of bakeries and food service said, “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,” in a conference call with analysts in March.