Kellogg Co., the multinational food producing company, plans to lay off 230 employees and close its Northern California sales office in Roseville.
Confirmation of the layoffs came in the form of a standard “WARN Act” letter received by the California Employment Development Department on May 30. The Worker Adjustment and Retraining Notification Act requires large businesses to give early warning of layoffs and closures.
In the letter, Joe Lierz, director of labor relations, said Kellogg will close and lay off employees at its sales office at 300 Harding Blvd. The letter said their last day of work is expected to occur between Aug. 4 and Aug. 17.
The letter noted a previously announced “change in (the company’s) snacks sales and distribution model.”
In February, Battle Creek, Mich.-based Kellogg announced that it would exit its “Direct Store Delivery” network in the second quarter, transitioning its U.S. snacks operation to a warehouse model already in use elsewhere. The company said the warehouse model would reduce “complexity and cost structure while driving growth and profitability for the company and its retail partners.”
In simple terms, the move allows product to go to retailers’ warehouses, enabling Kellogg to shut its own distribution centers. That in turn allows downsizing in other departments. In its February announcement, Kellogg noted: “Warehouse distribution is already utilized by 75 percent of Kellogg’s U.S. sales, including the Pringles, Frozen Foods and Morning Foods businesses. Moving completely to a warehouse distribution system offers a significant opportunity to accelerate growth.”
The company said changing consumer shopping patterns – particularly consumers having a wider variety of retail outlets available to them, including online − played a part in the change.
Kellogg hopes to complete the transition in this year’s fourth quarter. The company also said it is providing severance and benefits, “as well as offering retention packages for impacted employees to help ensure business continuity.”
The latest round of WARN Act letters to EDD also included the upcoming closure of a Kellogg Co. office in La Palma, with an anticipated 280 layoffs.
Kellogg’s extensive list of food brands are produced in nearly 20 countries. Brands include Corn Flakes, Rice Krispies, Pringles, Special K, Eggo, Cheez-It and Pop-Tarts.