General Mills Inc.’s big cost-cutting drive continued with the announcement Thursday of two more plant closings and the acknowledgment that much of its white-collar workforce reduction — 700 to 800 people — is occurring in the Twin Cities.
The Golden Valley company is struggling with weak conditions in the packaged-food industry that have crimped sales and profits. To counter the downswing, General Mills last fall began two major cost-cutting initiatives that have so far led to announcements of about 1,800 job cuts.
General Mills said Thursday it plans to close two refrigerated baked goods factories, in Indiana and Ontario, Canada. That raised its plant-closure tally to four since fall.
Meanwhile, a General Mills spokesman confirmed that Minnesota will take the biggest blow from a cost-cutting drive called “Project Catalyst,” which is aimed at lowering administrative and overhead costs. “Much of the impact will land in Minnesota because of the headquarters,” spokesman Tom Forsythe said.
The company has declined to comment on the number of job cuts, however.
General Mills employs about 5,000 people in the Twin Cities and had 43,000 employees worldwide at the end of May 2014.
“Project Catalyst” and the layoffs accompanying it are expected to be completed by early February.
General Mills’ drive to cut its manufacturing and distribution costs is called “Project Century.” With the two new plants, the closings tied to that project would eliminate about 1,075 jobs.
The company Thursday announced a “preliminary” decision to close its New Albany, Ind., plant, which employs about 400. Its Midland, Ontario, factory, which employs about 100, will also close. Last fall, General Mills said it would close a cereal factory in California and a yogurt plant in Massachusetts.
General Mills’ cost-cutting campaigns are aimed at reducing annual expenses by around $250 million in the wake of stagnant sales.
Other packaged food companies have implemented similar cost-reduction strategies, as consumers have been pinched by a weak economy recovery or have shifted their tastes away from processed foods.