BATTLE CREEK, MICH. — Kellogg Co. in May announced a proposed reorganization plan for its European business designed to “simplify the organization, increase organizational efficiency and enhance key processes.”
Kellogg expects the project to result in cumulative pre-tax charges of approximately $50 million. Cash costs are expected to be about $57 million, the company noted in a May 13 filing with the U.S. Securities and Exchange Commission.
Kellogg said it expects to incur approximately $33 million in employee-related costs, which will include severance and other termination benefits; as well as other costs totaling approximately $17 million, which primarily will consist of charges related to relocation, third-party legal and consulting fees, and contract termination costs.
“The proposed changes are subject to consultation processes as appropriate, with employee representative groups in the region,” Kellogg said. “The overall project is expected to be substantially completed by Dec. 31, 2020.”
Kellogg entered Europe in the 1960s. The company had adjusted operating profit of $333 million in its Europe division in the fiscal year ended Dec. 29, 2018, which compared with $316 million in fiscal 2017. Net sales totaled $2,395 million, up from $2,291 million.