The Omaha plant is scheduled to cease operations by the end of 2026, while production will be scaled back at the Memphis factory starting in late 2025. These changes will result in a reduction of over 17% in the company’s workforce, affecting around 550 employees.
Concurrently, WK Kellogg plans to ramp up production at its Battle Creek, Michigan; Belleville, Ontario; and Lancaster, Pennsylvania plants, with an anticipated investment of approximately $450m to $500m. The restructuring is expected to incur cumulative pre-tax charges between $230m and $270m.
CEO Gary Pilnick stated, “Today’s announcement regarding modernizing our supply chain marks a significant step forward in executing our strategy and enhancing WK Kellogg Co.’s long-term strength and resilience. These actions will help transform our supply chain and enhance our production capabilities, supporting top-line delivery and driving margin expansion.”
In its Q2 results, WK Kellogg reported sales of $672m, a 3.9% decline year-on-year. Net income increased from $27m to $31m, while adjusted EBITDA decreased from $89m to $78m. The company forecasts 2024 adjusted net sales to be at the lower end of its previous range.
Recently, Kellanova, the other entity resulting from Kellogg’s spin-off last year, announced plans to close two factories in North America and Europe to boost efficiency and productivity.
