MONEY

Kellogg to cut at least 125 jobs in Battle Creek

The Battle Creek-based cereal and snack food giant said the majority of the jobs impacted will be at its local headquarters.

Dillon Davis
Battle Creek Enquirer

This story has been updated.

Kellogg Co. plans to cut 250 jobs from its North American operations, the majority of which will affect employees at its headquarters in Battle Creek.

The company confirmed Wednesday it is slashing jobs as a part of Project K, a cost-cutting program by the company. In a statement, the company said it wants to become "more efficient and effective to meet the needs of the people who buy our foods," which it hopes to do by "eliminating work that doesn't drive the highest returns."

The Battle Creek-based breakfast and snack food company did not say which departments will be affected, how it determined which jobs are being reduced or how many local employees could lose jobs.

"The majority of the impacted employees work at our Headquarters in Battle Creek, and changes are taking place across most functions in the organization," the company told the Enquirer. "As you would expect from Kellogg, we’ll help our impacted people through these transitions, including offering severance benefits and outplacement services."

Battle Creek Unlimited President and CEO Joe Sobieralski informed the BCU board of the company's decision early Wednesday.

Sobieralski said BCU has been focused on diversifying local industry with new manufacturing jobs — particularly in light of recent job cuts expected at TreeHouse Foods Inc. and Post Consumer Brands — but those still "aren't going to equate to losing white-collar jobs."

"As we see the announcement of 250 North American colleagues, obviously, Battle Creek is headquartered here, so we don't know the full impact of the jobs affected here in Battle Creek, if any at all," Sobieralski said. "This is number three of the (losses in) cereal industries in Battle Creek and it really speaks to the industry as a whole. It isn't just a Battle Creek issue, but it hits more home because we're Cereal City USA."

"(The cereal industry) is in decline and this speaks to the needs of why BCU exists."

It is yet another blow to cereal industry workers in Battle Creek. In November, TreeHouse Foods said it's cutting 100 jobs from its ready-to-eat cereal plant at 150 S. McCamly St. in Battle Creek.

Those cuts, knocking out 63 percent of the factory's workforce, are expected to begin this year and take place over a 15-month period.

The next month, Post Consumer Brands said it is planning to shift some of Battle Creek's cereal production volume from its site at 275 Cliff St. to other facilities. Post declined to share the number of job cuts expected there, but the number is believed to be between 70 and 80 positions, according to Battle Creek city officials.

It's not the first job reduction Kellogg has made under the Project K umbrella. The company previously said the initiative, launched in November 2013, would have a net effect of "100-200 roles" in Battle Creek, leaving the headquarters with 2,300 to 2,500 employees.

However, the company already had made reductions in its North American financial unit as well as its human resources and supply chain departments.

Battle Creek Assistant City Manager Ted Dearing said workforce reductions always are difficult, but it becomes even more so when it comes from one of the area's largest employers and one so entrenched in the community's identity.

Industry experts have said sales in the cereal industry are slumping due to changing consumer tastes towards healthier options, a greater selection of breakfast options and increasingly busier lifestyles. Dearing said there's an ongoing push to "remain positive" despite recent industry cuts with hopes the cereal business will rebound in the coming years.

Even with a weaker cereal industry, Jim Robey said Battle Creek still has a "relatively strong" economy. Robey, the regional economic planning services director for the Kalamazoo-based W.E. Upjohn Institute for Employment Research, said Kellogg's decision doesn't say anything in particular about the area's economic outlook other than it has a need to continually diversify its industries.

"Well certainly the more you diversify the economy, the more immune you are to the shock of a loss in an industry," he said.

Still, Robey said there's a need for area residents to "differentiate between things the community can affect and the things it can’t."

"When there’s a global strategy to find the most profitability as the company responds to shareholders, there isn't always something a community can do," Robey said. He added that while it does hurt to lose cereal industry jobs, "it's not always the community driving it."

In the interim, at least, the city wants to try and keep affected Kellogg personnel from leaving the area. Michigan Works! Southwest Director of Talent Solutions Chris Walden said the agency has been working with BCU in regards to Kellogg's decision, as well as recent other reductions at cereal plants in the area.

Dearing is hopeful the city will be able to get through this roadblock.

"It’s difficult for the community and certainly I feel for those folks who will be impacted by the changes," he said. "We keep reminding ourselves of how challenging the cereal industry is. Companies are making difficult decisions to compete the way they need to compete. While we understand, it’s still a difficult pill to swallow.

"Obviously, we’re going to rally around the folks that will lose their jobs and try to find opportunities for them in Battle Creek."

Contact Dillon Davis at 269-966-0698 or dwdavis@battlecreekenquirer.com. Follow him on Twitter: @DillonDavis