Kellogg Eyes 700 Layoffs

Kellogg said Thursday it's planning to close part of its Battle Creek cereal plant and lay off about 700 workers in order to save $35 million to $45 million annually.

Kellogg (K) shares dipped 1/8 to 33 7/8 on Wednesday ahead of the news.

"An integral part of our strategy is continuing to reduce costs and improve efficiency to enable greater reinvestment for profitable growth," Kellogg CEO Carlos M. Gutierrez said in a statement.

"Streamlining our operations and avoiding future costs would help keep our North American cereal business cost-competitive going into the 21st century," he said.

Under the proposal being considered, up to 700 of the current 1,100 hourly and salaried workers at the South Operations portion of the Battle Creek plant would be eliminated as early as the first quarter next year. The plant, which makes Kellogg's Corn Flakes, dates back to 1907.

Some production capacity would be relocated to other Kellogg cereal plants in North America.

The company will make a final decision after discussions with the local union.