WK Kellogg to close Omaha plant, reduce Memphis workforce, move production to newer facilities

W.K. Kellogg Co. is closing one U.S. breakfast cereal factory and cutting jobs at another as part of a plan to consolidate operations into newer facilities.

The company said Tuesday it will close its plant in Omaha, Nebraska, by the end of 2026. It also plans to reduce production at its plant in Memphis, Tennessee, starting next year.

W.K. Kellogg said it will increase production and invest in new infrastructure, equipment and technology at its plants in Battle Creek, Michigan; Lancaster, Pennsylvania; and Belleville, Ontario. The company said it plans to invest $390 million in new technology and infrastructure and will incur a one-time charge of $110 million in restructuring costs.

Battle Creek-based W.K. Kellogg said the plan would result in a net loss of 550 jobs, including those at plants that will increase production. The company did not immediately respond when asked Tuesday how many workers would lose in Omaha and Memphis.

Omaha Mayor Jean Stothert said in a statement that she only learned of the planned closure Tuesday morning.

“I am certainly disappointed that Kellogg’s would make such a significant announcement in this manner,” Stothert said. “After more than 75 years in Omaha, Kellogg’s will leave a great void.”

The W.K. Kellogg plant in Omaha was the epicenter of a strike against the company in 2021, when workers went two months without work to protest a two-tiered wage structure and other issues. At one point, Kellogg sued its union, claiming striking workers were blocking entrances to the Omaha plant.

The strike ended in late 2021 when the company agreed to pay raises and other benefits.

The reorganization comes amid a slump in U.S. demand for cereal. Cereal sales soared during the pandemic as families stayed home and ate breakfast together. But they have struggled since then. Unit sales of cereal fell 4.2% over the past year and 3.6% in the year before, according to Nielsen IQ, a market research firm.

W.K. Kellogg Co. was formed last year when its former parent company, Kellogg Co. — founded in 1906 — split into two companies. W.K. Kellogg retained its breakfast cereal business, including brands such as Frosted Flakes, Fruit Loops, Rice Krispies and Raisin Bran. Chicago-based Kellanova houses many of the company’s best-sellers, including Pop-Tarts, Pringles, Eggo Waffles and Cheez-Its.

W.K. Kellogg said Tuesday that its net sales fell 4% to $672 million in the April-June period. The company received some boost from higher prices and rising sales of premium products such as Special K Zero. But its overall sales fell 4.8%, and the company said it felt some pressure from its own-brand cereals as customers sought better value.

WK Kellogg shares fell more than 7% on Tuesday.