Following a decline in sales in the second quarter, WK Kellogg Co plans to close its plant in Omaha, Nebraska, and reduce production at its Memphis, Tennessee, facility, both of which will be phased in over 2025.

The Omaha plant will begin ramping down in late 2025 and close completely in late 2026. The Memphis plant will reduce production in late 2025, “resulting in a more focused, streamlined facility,” the company said in its second-quarter conference call with analysts on Aug. 6.

The two measures would reduce the workforce by around 550 jobs, including estimated staff increases at the plants where production would be increased.

Investments in new infrastructure, equipment, technology and capacity will increase production and likely employment at the plants in Battle Creek, Michigan; Belleville, Ontario; and Lancaster, Pennsylvania.

Kellogg officials used the conference call with analysts to reiterate their plan to modernize the supply chain. The company plans to spend about $450 million to $500 million on supply chain modernization, including capital expenditures of up to $390 million and restructuring and other costs of about $110 million.

“These actions will help transform our supply chain and enable us to improve our production through a more reliable, flexible and cost-efficient manufacturing network. This will support revenue delivery and drive margin improvement,” said Chairman and CEO Gary Pilnick.

Second-quarter revenue was $672 million, down 3.9% year over year. Six-month revenue was $1.379 billion, down 2.9% from the first six months of 2023. Pilnick called them “on track to meet our full-year financial guidance despite a challenging operating environment.”