For some employees at General Mills (NYSE: GIS), which makes Cheerios, Kix, and Lucky Charms, the end of the rainbow has been reached, and there is no pot of gold.
The company has decided to reorganize in an effort to create a “new global organizational structure that will support growth and drive greater efficiency by streamlining the company’s leadership, maximizing global scale, and increasing operational agility,” the company said in a press release. COO Jeff Harmening has taken over global operations responsibilities, reporting to CEO Ken Powell. The position of international COO has been eliminated, and the company’s four business groups will each have a group president directly reporting to Harmening.
“As we wrap up our 150th anniversary year, we are ready to take the next step in our journey to truly operate as a global company and fully resource our best ideas to drive growth,” said Powell in a press release.
Jobs are being cut too
While the moves are being made to do all of the buzzword-driven things mentioned above, the changes will also let General Mills eliminate 400-600 jobs across the globe. The specific positions being cut have not been announced.
“We continue to prioritize both growth and returns,” said Harmening. “The structural changes announced today will help us unlock global growth opportunities and go after them by efficiently restructuring our teams and processes. In addition, the capability investments and savings generated by these changes will help us deliver our fiscal 2018.”
Plans for growth
In addition to restructuring its global operations into four key divisions — North America Retail, Europe and Australia, Asia and Latin America, and Convenience Stores and Foodservice — the company has other changes planned. Most notably, it hopes to “enhance its growth capabilities in several areas, including strategic revenue management (SRM), e-commerce, and marketing innovation, and intends to augment its current talent with external expertise in these areas over the next several months.”
And, while jobs are being cut, the company does plan to add a global chief marketing officer who will report to Harmening. It has also added a business unit to focus on its dairy business which will be based in France and be led by an executive reporting to the CEO.
Are these the right changes?
These sorts of reorganizations have a mixed track record. This one seems to make sense in many ways, but it also includes some head-scratching pairings, such as grouping Asia and Latin America, which do not seem to be very connected markets, into one division. In the end, whether it will work will come down to more than just the quick savings realized from cutting jobs. For this reorg to succeed, it needs to lead to a more efficient company with rising sales.
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