Kellogg's to Cut Over 1,100 Jobs

ACCESSWIRE

Wed, Feb 15, 2017, 5:44 PM

NEW YORK, NY / ACCESSWIRE / February 15, 2017 / Warnact.com reports that Kellogg Company intends to lay off more than 1,100 employees due to its decision to use grocers' warehouses rather than directly deliver many of its products to stores. The company announced last Wednesday that it plans to begin moving away from its delivery network and instead will implement a strategy to ship directly to retailers' warehouses. As a result, the company will shut down 39 of its distribution centers.

Those sites employee on average about 30 full-time workers, Kellogg spokeswoman Kris Charles said. That's the equivalent of about 1,170 jobs. These closures are expected to be completed by the end of 2017, and the change is said to come as the grocery industry itself is changing; online sales of staples are increasing and national retailers such as Walmart and Target have focused more on food sales.

"While this is the right move for the company to achieve our long-term objectives, it was a difficult decision because of its impact on some sales and distribution employees," Charles said in an email statement.

The Kellogg Company already partially uses the warehouse system for some of its products, including Pringles and its frozen foods. However, all cereals, cookies, crackers and crisps are most often delivered through direct sales teams, according to the company's 2015 annual report.

Charles also opined that the closures "will not have a sizable impact on any one community," including Battle Creek, where Kellogg's has its headquarters, but will affect some more than others. Below is a breakdown of the communities in which jobs will be lost.

• In Cicero, N.Y., the company will close a distribution center with 30 workers, The (Syracuse, N.Y.) Post Standard reported.

• In Evansville, Ind., the distribution center that employs about 30 workers will close by the end of the year, the Evansville (Ind.) Courier & Press reported.

• In Hagerstown, Md., the distribution center, which opened in 2008, employs 85 people, The (Hagerstown, Md.) Herald-Mail reported.

• In Houston, Kellogg's snack distribution center will be shuttered by the end of the year, according to KPRC-TV, Houston.

• In Sharonville, Ohio, 80 or 90 employees will lose their jobs by the end of July, workers told WCPO-TV, Cincinnati.

• In Warren, Ohio, a Kellogg distribution center will close by the end of the year, The (Youngstown, Ohio) Vindicator reported.

Furthermore, outgoing CFO Ron Dissinger has hinted that Kellogg's cost-cutting program, dubbed "Project K" which was first introduced in 2013, will be extended into 2019. Project K was designed to promote efficiency and the reshaping of the overall business, has resulted in a number of company layoffs, including last month's decision to cut 250 North American jobs. Previously, the cost cutting program was scheduled to end early this year.

According to the law firm ofLevi & Korsinsky LLP, an employee advocacy firm, similar mass layoffs may produce possible employment violations. For example, the WARN Act is a United States labor law which protects employees of businesses with 100 or more employees. If an employer conducts a plant closing or mass layoff affecting 50 or more employees who constitute at least 33% of the employees at that site, or more than 500 employees, the employer must provide 60 days' advance notification. Employees are therefore entitled to full pay and benefits during such period prior to layoff and may also be entitled to various other protections under the law.

Moreover, the firm is specifically concerned over the Cicero, NY distribution center. Several states have enacted their own "mini-WARN Acts" with generally more stringent requirements. In New York, the WARN Act applies to any private business with 50 or more full-time employees who have been employed at the business for at least 6 of the 12 months preceding the date notice was required. Under the New York WARN Act, notice is required when the employer conducts a plant closing or mass layoff affecting 25 or more workers if the laid-off workers make up at least 33% of the workforce, or at least 250 full-time workers at a single site.

Levi & Korsinsky believes that the Kellogg Company might have violated the WARN Act, and/or the New York WARN Act, and believe affected individuals may be entitled to back wages and benefits from the company.

The advance notice is intended to give employees and their families transition time to adjust to the prospective loss of employment, to seek and to obtain other employment, and, if necessary, to enter skill training or retraining programs that will allow these workers to successfully compete in the job market. Oftentimes, employees don't receive the benefits they are due, or are otherwise harmed during the layoff process and may have recourse under the law.

For more information about the WARN Act and other employee rights, contact:

Levi & Korsinsky LLP
www.WARNact.com
877-363-5972

SOURCE: Levi & Korsinsky LLP