BATTLE CREEK, Mich., Nov. 4 (UPI) -- U.S. cereal maker Kellogg Company said it would cut 7 percent of its global workforce by 2017 to trim operating costs while cereal sales decline.
The company said its net sales fell 1.3 percent to $2.4 billion in the third quarter in its North American market with its U.S. Morning Foods operation posting a sales decline of 2.2 percent.
Reported net sales in the U.S. Snacks business fell 2.5 percent, Kellogg said Monday.
The company that produces Corn Flakes, Coco Pops, Rice Krispies and other iconic breakfast brands said it would expect pre-tax charges of up to $1.4 billion for streamlining and restructuring, but save about $450 million in operating costs starting in 2018.
Kellogg, which also produces Keebler cookies, Pringle snack chips, Eggo waffles, Pop-Tarts and Cheez-it crackers, currently has a global workforce of about 31,000. It called the new cost-saving initiative Project K, similar to the name of Special K, a cereal it advertises as slimming.
"The focus of the program will be to strengthen existing businesses in core markets, increase growth in developing and emerging markets, and drive an increased level of value-added innovation," the company said.
"We are excited by the potential and opportunities we see for growth in the categories in which we operate. As a result, we are making the difficult decisions necessary to address structural cost-saving opportunities which will enable us to increase investment in our core markets and in opportunities for future growth," said John Bryant, Kellogg Company's president and chief executive officer, in a statement.