General Mills, Medtronic Announce Job Cuts
MINNEAPOLIS (WCCO/AP) — Hundreds of job cuts were announced today at General Mills. The food conglomerate, based in Golden Valley, is eliminating 850 jobs worldwide and about half of them in the Twin Cities.
General Mills’ current global workforce is about 35,000, including 5,600 in the Twin Cities.
A spokesperson said administrative and support positions will be the most affected. The cuts are being attributed to organizational changes in all areas of the company.
Medtronic, the Fridley-based medical device manufacturer, is also slashing 1,000 jobs, including including 220 at its facility in Mounds View.
The company has 45,000 employees worldwide.
John Budd is a professor of work and organizations in the University of Minnesota’s Carlson School of Management.
“Whenever anyone loses their job, we should be concerned,” Budd said. “People have families to raise, bills to pay.”
But he said in the grand scheme of things, the numbers are not that big.
“Maybe 400 jobs or so for General Mills locally, and we have a huge robust here, locally,” he said. “So in the grand scheme of things, it’s probably not that big of a deal.”
Budd said it is a reminder that companies are always looking for ways to be more efficient, and finding new ways of cutting costs. He said we can’t be complacent, and think that the recession is over.
He also said the announcements continue to illustrate the power of Wall Street.
“Both of these announcements really are not aimed at us, as consumers or the public, but they are really aimed at Wall Street,” he said. “And trying to convince Wall Street that these companies continue to be vigilant, about cutting costs and therefore dropping their stock price.”
Budd said most companies don’t typically make the same kind of announcements when they are hiring new employees.
General Mills, the maker of Cheerios cereal, Nature Valley granola bars and Hamburger Helper, said the moves will make it more effective and allow it to focus on key growth strategies.
General Mills said it expects the plan to result in total pretax charges of about $109 million, which will cover costs related to workers whose jobs are terminated and equipment.
The company said about $94 million of those charges will come in the fiscal fourth quarter, which ends Sunday. The rest will be recorded in fiscal 2013. It plans to use the savings from the cuts on future growth strategies and to speed up global development.
General Mills said it still hopes to post an adjusted fiscal 2012 profit of $2.53 to $2.55 per share. Analysts expect a profit of $2.54 per share.
The company employed about 35,000 people across the world in fiscal 2011, according to its annual report. In March, it said its fiscal third-quarter profit fell slightly as a result of higher costs.
General Mills’ brands remain some of the most popular. But like most of its peers, the company has struggled with higher costs for everything from ingredients to labor and been forced to raise prices to offset them.
General Mills shares rose 3 cents to close at $38.58 Tuesday.
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