Food producer Cargill said Tuesday it will cut about 8,000 jobs globally after falling crop prices tanked profits of the largest privately held company in the US.
The Minneapolis-based firm, the world’s largest agricultural commodities trader, plans to slash its 164,000-person workforce by 5%.
Most of Cargill’s job reductions would take place this year, the company’s president and CEO, Brian Sikes, said in a memo reviewed by Reuters.
“They will focus on streamlining our organizational structure by removing layers, expanding the scope and responsibilities of our managers, and reducing duplication of work,” Sikes said in the memo.
The job cuts will not affect executive employees, though they will hit a number of senior level positions next on the ladder, people familiar with the matter told Bloomberg, which first reported the layoffs.
Cargill, which started in 1865 as a single grain warehouse, reported revenue of $160 billion for its 2024 fiscal year that ended in May – a nearly 10% decline from a record $177 billion the previous year.
The company reported profits of $2.5 billion in the same year, its lowest profits since the 2015-16 period, according to Bloomberg. It’s also less than half of the $6.7 billion in net profit the company earned in the 2021-22 fiscal year.
Cargill and other crop trading companies like Bunge Global SA and Archer-Daniels-Midland Co. have suffered from shrinking profits as wheat, corn and soybean stockpiles sent prices down to near four-year lows.
It has been particularly rough for Cargill, which also suffered its smallest US cattle herd in seven decades. The company is the third-largest beef processor in the country.
Earlier this year, the food supplier, told employees it would be cutting back its business units to three from five after less than one-third of its divisions achieved their earnings goals in fiscal year 2024, according to a memo reported by multiple media outlets.
Cargill also slashed about 200 tech jobs across its locations.
“We have laid out a clear plan to evolve and strengthen our portfolio to take advantage of compelling trends in front of us, maximize our competitiveness, and, above all, continue to deliver for our customers,” Cargill told The Post in a statement.
Sikes took the helm at Cargill at the start of last year as the company faced dwindling cattle herds and worsening profit margins.
It seems beef suppliers should not expect relief anytime soon. Tyson Foods CEO Donnie King said earlier this month that his company has yet to see signs that ranchers are rebuilding their herds.
Source - https://nypost.com
