As part of its restructuring plan, General Mills shall be cutting some of its jobs around the world. According to a Form 8-K filed by General Mills, Inc. with the Securities Exchange Commission, the said job reduction is part of Project Compass. This move will see the termination of about 675 to 725 positions.
Moreover, Star Tribune has learned from a General Mills spokeswoman that around 20 jobs in Minnesota (where its headquarters is located) will also be affected during the restructuring. Moreover, an email from the company spokesman, Kirstie Foster also revealed that the international job cuts will be aimed primarily at salaried and administrative positions.
According to the food business giant, Project Compass is made up of a strategic restructuring plan that will allow the billion dollar food company to “accelerate long-term growth through increased organizational effectiveness and reduced administrative expense” of its International Segment. The job cuts are expected to cost General Mills around $57 to $62 million, primarily due to one-time employee termination benefits. From this, it is expected that around $54 to $57 million will be reflected in the first fiscal quarter of 2016.
Moreover, General Mills expects the restructuring to be fully completed by early 2017. Project Compass is expected to bring in an annual cost savings of around $45 to $50 million. Meanwhile, the company expects around $25 to $30 million of the cost savings to be realized during the 2016 fiscal year.
According to a 10-K form filed by General Mills with the SEC last year, the company’s manufacturing operations is spread across 16 countries while the products are marketed in over 100 countries. As of May 2014, General Mills estimates its workforce at around 43,000. This includes both full time and part time employees.
Some of General Mills’ brands include Cheerios, Häagen-Dazs, Pillsbury, Lucky Charms, Old El Paso and Yoplait. The company’s production facilities numbered to 65, 30 of which are located in the United States while the rest are found in various continents overseas. In fact, General Mills reportedly has principal production facilities in Australia, Brazil, Canada, China, France and Spain. According to its website, the company earned net sales of $5.4 billion last year in its International Region while US retail earned $10.6 billion. Meanwhile, it earned global net sales of $19.2 billion during the 2014 fiscal year.
The latest round of job cuts is actually not the first of the year for General Mills. Back in January, Reuters had reported that General Mills had planned to close down several of its plants as part of a cost saving program, leading to 500 job cuts in Midland, New Albany and Ontario, Canada.
Moreover, an amended 8-K form filed back in September 2014 by General Mills revealed that Project Catalyst was also launched to generate an annual cost savings of around $125 to 150 million beginning the fiscal year of 2016. This was done by reducing around 700 to 800 job positions that were primarily in the U.S. The charges to be accrued by General Mills for Project Catalyst was estimated at around $135 to $160 million, made up mainly of one-time employee termination benefits. This project is expected to be completed by end of the 2015 fiscal year.