KELLOGG CUTS STAFF BY 525, CONTRACTOR POSTS BY 240

BARBARA McDONALD

BATTLE CREEK, Mich. -- Kellogg Co. here cut 525 staff positions and 240 positions filled by contractors who worked for other companies, Kellogg spokesman Anthony Hebron said. Money saved will be invested in new product development and more effective marketing, the company said. The cuts, which took effect last month, represent 21% of the company's office workers in North America, but less than 4% of its overall work force, which was 14,400 at the end of 1997. Kellogg's domestic market share of the cereal business is a "strong 32%, after a dip earlier," Hebron said.

In other news, there will be a price increase averaging 2.7% across some brands, Hebron said, but actual increases vary. For example, Kellogg's Bite Sized Frosted Mini-Wheats went down 11% in cost, but Low Fat Granola went up 11%. Hebron noted this is the first price increase since 1994, and follows price cuts in 1996.