Kellogg, home to brands including Special K and Pringles, is set to lay off staff as part of a push to improve its productivity.

The US giant does not expect to close any factories but will look to move around the manufacturing of various products across its sites in the Americas.

Kellogg is looking for the project to be mostly completed by early 2024. It sees improvements in productivity materialising a year earlier to “help offset cost inflation and reinvest in our brands”.

Last month, when Kellogg reported its first-half financial results, the Coco Pops maker struck a note of caution on margins and said it sees pressure on costs continuing into 2022.

In a stock-exchange filing issued today (3 September), the company did not disclose the number of employees that could be affected by the productivity project but the business outlined how much the measures would cost.

It said the project is expected to lead to “pre-tax charges of approximately $45m”, adding: “Cash costs are expected to be approximately $25m. The company currently anticipates employee-related costs totalling approximately $4m, which will include severance and other termination benefits; and other cash costs totalling approximately $21m, which will primarily consist of charges related to capital expenses. Non-cash costs are expected to be approximately $20m and primarily consist of accelerated depreciation and asset write-offs.”

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By GlobalData

Speaking to analysts last month after reporting Kellogg’s half-year numbers, chairman and CEO Steve Cahillane said the company is “planning for an ongoing challenging cost environment well into next year”.

Bryan Spillane of BofA Securities asked the company’s management for its view on costs into 2022 and what actions the business could take.

“We always like to say that our first line of defence against something like this is productivity, right? So, we’ve been working hard at productivity and looking for every area where we can be more efficient,” Cahillane said.