Job Cuts Continue at Kellogg Corporation
Hundreds of Americans employed by the popular cereal-maker Kellogg Company are facing layoffs following the company’s change of business strategy. In the latest round of job cuts, the company is closing its Roseville, Northern California sales office, which will cause 230 employees to lose their jobs.
The Michigan-based company sent out an early notice to workers under the Worker Adjustment and Retraining Notification Act (WARN Act) that the layoffs will be taking place in the first half of August.
These latest layoffs are succeeding hundreds of other job cuts that management carried out in the last two months. As I reported earlier, Kellogg has recently closed numerous distribution centers in Ohio, North Carolina, and Philadelphia, which collectively resulted in over a thousand layoffs.
Kellogg management has cited a change in their distribution model as the reason behind the layoffs. The company had announced a change in its delivery and distribution model earlier this year. Kellogg is moving from the Direct Store Delivery (DSD) model to a new model under which products will be shipped directly to retailers.
The old delivery model required Kellogg Company to maintain a network of warehouses or distribution centers. The company used to ship the goods from its factories to its own warehouses. From there, the goods were sent out to retailers. This required the company to employ workers at each distribution center.
However, under the new distribution model, Kellogg will no longer be maintaining company-owned warehouses, and instead will be delivering the goods from the factories straight to the retailers. Prior to this change, Kellogg Company was conducting nearly 75% of its business deliveries through its own warehouses and distribution centers.
The transition to the new model is expected to continue this year and will likely be completed by the end of the fourth quarter. The company has also indicated that the next warehouse closure will take place in La Palma, California and will likely result in another 280 layoffs.
Kellogg has production facilities in about 20 countries and owns some of the most popular brands, including household names like “Corn Flakes,” “Rice Krispies,” “Pop-Tarts,” and “Pringles.”
“Kellogg will close its Roseville office and lay off 230 employees,” The Sacramento Bee, June 14, 2017.