General Mills is closing its on-site child care at headquarters

General Mills is ending on-site child care at its Golden Valley headquarters on Sept. 30, the company told employees last week.

Demand for the benefit has dropped as employees work a hybrid schedule in and out of the office. The day care is just a quarter full, General Mills said in its announcement, leading to increased costs.

General Mills' child-care center is licensed to care for up to 60 infants, defined as up to 16 months old. The company also offered the on-site child care as an emergency backup for employees. That benefit is also ending.

"Post-pandemic, we saw a notable drop in usage as families opted for child-care options closer to home," said Mollie Wulff, a spokeswoman for General Mills. "We're now focusing on supporting our employees by making significant investments to broaden caregiving support, including paid time-off programs, health and well-being resources for the entire family and increased workplace flexibility."

The move comes as child care, especially for infants, is increasingly hard to find and afford for many Minnesota families. Wait lists can stretch a year or longer. General Mills employees who use or planned to use the headquarters day care now have eight months to find alternatives.

Child care is a financially challenging business across Minnesota. Nearly all child-care providers outside the Twin Cities metro area lose money, according to a recent cost report published by the Minnesota Department of Human Services.

General Mills' subsidized day care has been part of a longstanding benefits package that has won the Cheerios maker numerous awards for being a family-friendly workplace. Last year the company placed 23rd in a Forbes ranking of the best companies for women, and Newsweek gave the company 4½ out of 5 stars on its list of the country's best workplaces for parents and families.

The child-care center, operated by Bright Horizons, is one of a few employer-sponsored options around the Twin Cities. Best Buy subsidizes backup care for employees at the child-care center in its Richfield headquarters, and Boston Scientific employees can access on-site care in Arden Hills. Hormel Foods is currently building a child-care center near its headquarters in Austin, Minn., that includes 130 slots.

Child care as a business is made more difficult by strict regulation, labor shortages and an imbalance between what families can afford and what centers need to charge to break even. Many depend on state grants, or employer subsidies, to remain open.

"Ask any employer across Minnesota about what keeps them up at night and you are likely to hear that lack of available child care is a major barrier to their continued viability," Suzanne Pearl, Minnesota director for First Children's Finance, said in a Minneapolis Fed webinar last year. "If the child-care sector fails, the rest of the economy follows."

Despite the need, last year the Minneapolis Fed counted just 42 employer-sponsored child-care providers in Minnesota with a capacity of about 2,700. Statewide there is licensed capacity for about 220,000 kids, a decline of 4% since 2019.