General Mills to cut 850 jobs worldwide

American food processing company General Mills plans to cut 850 jobs globally as part of its restructuring plan to reduce costs and improve efficiency.

The jobs cuts, which represent 2.4% of its global workforce of 35,000, will be spread across the company’s operations, but will mostly affect administrative and support positions.

General Mills spokeswoman Kirstie Foster said that roughly 50% of the cuts will be in Minneapolis, where the firm is headquartered.

The company plans to use the savings from the restructuring actions to increase innovation across its global business platforms and support its future growth plans.

General Mills expects total restructuring charges of approximately $109m, which will include one-time employee separation expenses as well as asset related costs. The charges will include $13m related to the write-down of production equipment.

About $94m of the restructuring cost will be included in the fiscal fourth quarter, which ends on 27 May 2012, while the rest will be recorded in fiscal 2013.

The company stood by its earlier forecast of earnings of $2.53 to $2.55 per share for fiscal 2012.

General Mills, which produces Progresso soups, Cheerios cereal and Green Giant vegetables, has been struggling from higher cost of raw materials and has taken up pricing actions.

For the third quarter ended 26 February 2012, the company reported marginal decrease in net income to $391.5m, due to higher commodity costs; however, it posted 13% increase in net sales to $4.1bn.

With ingredients costs surging, several packaged food manufacturers have been raising prices, which has discouraged consumers from buying products.