US food company General Mills plans to eliminate 625 jobs as part of a global cost-cutting drive to reduce administrative costs and “align resources behind high-growth initiatives”.
The owner of brands such as Nature Valley protein bars and Häagen-Dazs ice cream expects the round of job cuts to be completed by the end of its current fiscal year in May 2019, the company said in its fourth-quarter and full-year earnings release yesterday (27 June).
New York-listed General Mills added that it will incur US$55m in related net expenses, most of which will be cash. It recorded $49.3m of restructuring charges related to these actions in the year just ended in May.
Reuters reported the Minnesota-based firm is undergoing the restructuring mainly due to falling sales of its Yoplait yogurt brand and also because of rising commodity and freight expenses.
General Mills’ North America retail segment posted a 12% decline in net sales for its US yogurt unit last year, partially offset by a 2% increase in U.S. snacks and a 3% rise in Canada.
In the 12 months ended on 27 May, 2018, the company’s operating profit dropped 2% to $2.51bn, with margins down 50 basis points. Adjusted operating profit margin fell 90 basis points to 17.2%.
Net sales edged up 1% to $15.74bn, while net income surged 28.6% to $2.13bn.