DUBUQUE, Iowa — Hormel Foods announced Tuesday it is cutting work for 75 employees in Minnesota, and building a multi-million dollar expansion in Iowa instead.

The Austin-based company said it would move production of its Bacon Bits from a Tony Downs Food facility in St. James, Minn., to Hormel’s Progressive Processing plant in Dubuque, Iowa, which opened in 2010.

The Tony Downs plant could close in May, and its 75 employees could get jobs elsewhere at Tony Downs, according to company President Mike Downs.

Hormel chose Dubuque for the first phase in its two-phase, $36-million expansion plan. It’s unclear how many jobs will come with the first phase.

But if Hormel puts a second new line into the plant later, the project would create a total of about 90 more jobs at the plant.

Sites in Minnesota and Nebraska were among those considered for the expansion project.

Mark Seckman with the Greater Dubuque Development Corp. says the announcement about the second phase is expected within two years.

Hormel declined to release more details about its plans.

In November, Dubuque and Iowa state officials approved $4.1 million incentives package in hopes of luring the expansion to the area. Included in the package are state tax benefits, a jobs-training partnership with Northeast Iowa Community College and an extension of an existing tax increment financing agreement with the city.

—The Dubuque Telegraph Herald and the Associated Press contributed to this report.