ADM will soon layoff workers to reduce costs, sources claim

Global grain merchant Archer-Daniels-Midland will soon start laying off employees as part of a global effort to cut costs as low crop prices erode profit, three people briefed on the matter told on Friday.

One source said that the focus of the cutbacks would be on operations in the United States.

Prices of corn, soybeans, and wheat will be at their lowest levels in four years by 2024, as global stocks of these staple foods reach multi-year highs. This will reduce profit margins, especially for ADM, which makes money by storing, trading, and processing food around the globe.

ADM previously stated that it was focused on cost control as the global grain glut and low prices were dragging down profits. It also warned that this challenging commodities cycle will continue until 2025.

In December, rival agribusiness Cargill began to lay off employees in various parts of the world as part of a global drive to reduce headcount by at least 5%.

ADM has not disclosed how many jobs will be affected. The company declined comment on Friday.

One source stated that the United States would be the most affected region, with a focus on operational areas such as plants, warehouses and ports. The source said that layoffs will also occur in all departments and regions.

Source: ADM executives are expected to discuss the restructuring on Tuesday after the company reports its fourth quarter results. Reporting by Ana Mano from Sao Paulo, and Chris Prentice from New York. Editing by Karl Plume and Simon Webe.

(source: Reuters)