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Shortages of truckers and factory workers have slowed Kellogg’s ability to feed the voracious demand for its products produced as a response to COVID-19 lockdowns and dislocations. In Supply Chain Dive, Christopher Casey reports:
In Kellogg’s second quarter 2021 earnings call in early August, CFO Amit Banati said that the shortage of truck drivers is “widespread” and was draining money from the company at “much higher rates than what we had expected.”
With the overall shortage of labor, it’s clear that Kellogg is trying to be strategic in how it focuses its existing workforce. While the company won’t close any production facilities, it is setting aside about $4 million for “employee-related costs,” including “severance and other termination benefits.” As part of this restructuring,the company will be laying off 212 workers at its Battle Creek, Michigan facility by the end of 2023.
In a statement to Food Dive, the company said that it made the move to slash over 200 jobs in Battle Creek — 174 full-time and 38 salaried — after an analysis of its production network found that certain plants are more “cost-effective and better performing than others.
“We must ensure we have the right capacity in the right locations to reduce costs, increase efficiencies and become more competitive,” the statement said. Kellogg said it was committed to helping these employees, most of whom made ready-to-eat cereal, and their union “ensure they have outplacement assistance, resources, and support through this transition.”
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