General Mills layoffs are continuing, and the pain is being felt quite sharply in the city of Lodi, Calif.
The factory is set to close by this year's end, which will result in about 1,200 lost jobs if trucking, suppliers, and other ancillary businesses that rely on the factory are factored in, KCRA reported.
General Mills expects to cut 675 to 725 jobs nationwide, with 430 of those coming from Lodi, as it continues to wrestle with sluggish sales.
The maker of Cheerios, Yoplait and Progresso said on Thursday that it will record pre-tax costs of about $57 million to $62 million, mostly for employee termination benefits, according to Investor Place.
The move is part of a larger restructuring effort by General Mills, as the company, along with other packaged food makers like Kellogg's and Campbell's, has cut costs in order to offset slowing sales growth. Profit growth slowed over the last three reported quarters from 13 percent to 10 percent, and finally to 1 percent last quarter. Analyst consensus is for a 1 percent decline in profit growth for the May-ended quarter, Investor's Business Daily reported.
Net sales rose by barely 1 percent last year, and the Minneapolis-based company expects core sales to grow at a "low single-digit rate" this year.
Big-packaged food makers are facing changing tastes in their respective markets, with smaller players emerging that market themselves as being more wholesome or fresh, The New York Times reported.
The layoff announcement comes just days after General Mills said it will drop artificial colors and flavors in cereals in an attempt to meet customer demand for more natural ingredients, according to ZACKS.
General Mills believes that its current restructuring will be complete by early fiscal 2017, generating annual savings of about $45 to $50 million.
