General Mills Inc. said Thursday that it will begin a new round of cost-cutting, chiefly in its international division, that will result in the elimination of 675 to 725 jobs over the next year.
General Mills plans to cut about 700 more jobs
Most of the 700 trims will be of salaried positions abroad; the company will reinvest savings in global growth strategies.
June 26, 2015 at 2:17AM
The process will affect about 20 jobs in Minnesota, a company spokeswoman said. General Mills employs about 5,000 in the Twin Cities, though a round of cost-cutting announced last year led to the reduction of several hundred white-collar jobs here.
The international job cuts primarily affect salaried and administrative positions, company spokeswoman Kirstie Foster said in an e-mail. About half of General Mills' 42,000 employees worldwide are outside of the United States.
The Golden Valley company said the new international cost cuts would result in annual savings of $45 million to $50 million. "Savings will be reinvested to support the international segment's growth strategies and accelerate innovation across our global business platforms," Foster said.
General Mills and other packaged-food makers have been enduring flat to slightly lower sales for more than a year as more consumers shift to less-processed food that they perceive to be healthier.
International sales have been growing at a healthier pace than in the United States, though business trends have slowed in Brazil and China because of weakening economies, said Jack Russo, a stock analyst at Edward Jones.
About 30 percent of General Mills' fiscal 2014 sales of $13.6 billion came from foreign markets, including Canada.
Over the past year, General Mills eliminated about 1,400 jobs. Early in 2015, it announced two plant closings, though the company also said it would expand another factory.
Other big packaged-food makers are cutting jobs, too. "In general, you are seeing firms throughout this space take a harder look at their cost structure," said Erin Lash, an analyst at Morningstar Inc.
General Mills' restructurings in the U.S. over the past year have been known inside the company as Project Century and Project Catalyst, the former concerning manufacturing and distribution, the latter administrative and overhead costs.
The program aimed at its international operations has been dubbed Project Compass. The company said it will take a pretax charge of up to $62 million to pay for Project Compass, chiefly for severance and other employee-related benefits.
Staff writer Evan Ramstad contributed to this report.
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