General Mills, which Forbes magazine named "The Most Reputable Company in America" just last month – announced plans to cut around 850 jobs in a move to "lower costs and boost efficiency."
The Minneapolis-based maker of Cheerios cereal, Hamburger Helper and Nature Valley granola bars insists the layoffs will make the company more effective and allow it to better focus on key growth strategies.
Those positions that will be most affected by these cuts are support and administrative staff. The layoffs are part of organizational changes that are affecting virtually every area of the company.
Like many packaged food makers, General Mills has struggled with high commodity costs and weaker sales growth.
The plan is expected to total pretax charges of about $109 million, and that sum covers costs related to displaced employees from terminated positions and defunct equipment.
General Mills says $94 million of those charges will come in the fiscal fourth quarter – ending Sunday. The remainder of the $109 million will wait until 2013's fiscal year.
An adjusted fiscal profit of $.02 per share is expected by the company for 2012 – from $2.53 to $2.55 a share, while outside analysts expect a profit of $2.54 per share.
On Tuesday, FOX 9 News also learned that Medtronic is eliminating about a thousand jobs as well, and 220 of those positions are from the Mounds View-based division for heart rhythm devices.
While the 220 layoffs were previously known, but other 780 were a surprise. So far, it is unclear exactly where those cuts would come from.
"We are eliminating about 1,000 positions around the company and around the globe," said Gary Ellis, the company's chief financial officer, in an interview Tuesday. "It's kind of the normal, ongoing thing that goes forward as we shift resources from slower-growing markets to faster-growing markets."
But how does getting rid of a couple hundred lower-paying administrative jobs do anything to help a multi-billion-dollar company's bottom line? These job cuts were common during the recession. By now, shouldn't these be over? Are corporations taking a closer look at the bottom line again -- and if so, does that mean we will see more rounds of layoffs at Fortune 500 companies?
FOX 9 News will ask Paul Anton, chief economist at Anton Economics and economic advisor for the state of Minnesota, to get his take on what the layoffs mean.