Food maker Cargill on Tuesday said it would cut about 8,000 jobs globally after falling crop prices squeezed profits at America's largest privately held company.
The Minneapolis-based company, the world's largest agricultural trader, plans to cut its 164,000-person workforce by 5%.
The majority of Cargill's job cuts will take place this year, the company's president and CEO Brian Sykes said in a memo seen by Reuters.
“They will focus on streamlining the organizational structure by removing hierarchies, expanding the scope and responsibilities of managers, and reducing duplicative work,” Sykes said in the memo.
Officials said the layoffs will not affect executives, but executives will be affected by the next level of senior-level positions. Bloomberg first reported the layoffs..
Cargill, which started as a single grain warehouse in 1865, reported sales of $160 billion for the 2024 fiscal year that ended in May, down nearly 10% from a record $177 billion a year earlier. .
The company reported a profit of $2.5 billion for the year, its lowest profit since the 2015-16 period. According to Bloomberg. It also represents less than half of the $6.7 billion in net profit the company earned in fiscal year 2021-22.
Along with Cargill, agricultural trading companies such as Bunge Global and Archer Daniels Midland have suffered shrinking profits as stockpiles of wheat, corn and soybeans have pushed prices to near four-year lows.
The situation is especially tough for Cargill, whose U.S. herd is at its smallest in 70 years. The company is the third largest beef processing company in the country.
Earlier this year, the company said it would reduce its business units from five to three after fewer than a third of the units missed their fiscal year 2024 revenue targets, according to a memo reported by multiple media outlets. He said he informed his employees.
Cargill also cut approximately 200 technical jobs across its locations.
“We have developed clear plans to evolve and strengthen our portfolio in order to take advantage of the exciting trends in front of us, maximize our competitive advantage, and above all continue to deliver for our customers.” Cargill told the Post in a statement.
Sykes took the helm early last year as Cargill faced declining herds and declining profit margins.
Beef suppliers don't seem to be expecting relief anytime soon. Tyson Foods CEO Donnie King said earlier this month that the company has yet to see any signs that ranchers will rebuild their herds.
