General Mills, a well-known cereal and snacking company, has announced plans for a global transformation initiative that may include job cuts as part of its efforts to increase productivity. The company is set to take targeted organizational actions that are expected to be completed by the end of fiscal 2028, resulting in total charges of approximately $130 million. Of these charges, around $70 million are projected to be recorded in the fourth quarter of fiscal 2025, mainly from severance expenses.
This move comes after General Mills revised its sales and profit forecasts in March, citing a slowdown in U.S. snacking and softer demand in away-from-home food channels. Organic net sales are now anticipated to decline between 1.5% to 2%, compared to previous expectations of being flat to up 1%.
Inflation-weary consumers are cutting back on their purchases, leading to reduced volumes for General Mills and other food manufacturers. The restructuring at General Mills is part of a broader trend among companies looking to enhance their operations and reduce costs amid challenging market conditions.
In a statement, General Mills expressed the importance of returning the company to growth as its top priority. The company emphasized the need for increased investment in the business to drive product innovation, deliver compelling consumer value, and position General Mills for long-term success. While the decision to implement job cuts is a difficult one, it is deemed necessary to support the company’s strategic objectives.
Several other prominent companies in the food industry have also announced plant closures and job cuts this year, including PepsiCo, Conagra Brands, Post Holdings, and J.M. Smucker. J.M. Smucker recently revealed plans to close and potentially sell a Hostess manufacturing plant in Indianapolis by early 2026 as part of its efforts to streamline its production footprint.
Overall, the restructuring at General Mills reflects the broader challenges facing the food industry as companies navigate changing consumer preferences, supply chain disruptions, and economic uncertainties. By making tough decisions now, General Mills aims to position itself for sustainable growth and long-term success in a highly competitive market.
