Cargill, a giant in the commodities trading industry, plans to reduce around 8,000 positions
Cargill, a global trading company, announced on Tuesday that it will cut 5% or 8,000 jobs from its workforce. Revenues in the most recent fiscal period were down due to low crop prices.
Cargill, a privately-held agricultural merchant, is under pressure because the prices of commodity crops, like wheat, corn, and soybeans, are at near four-year lows. Also, crop processing margins are shrinking.
In a memo that was reviewed on Tuesday, Brian Sikes said the majority of Cargill’s job cuts would occur this year.
In the memo, Sikes stated that the team would focus on streamlining the organisational structure of the company by removing unnecessary layers, increasing the scope of responsibilities for our managers and reducing the duplication of tasks.
Cargill, in response to a question about the memo, said that the move was part of a strategic shift at the company.
It said, "Unfortunately, this means that our global workforce will be reduced by approximately 5%."
Cargill, a Minnesota-based company, has over 160,000 employees. A 5% reduction in staff would affect about 8,000 positions.
Cargill, a company not listed on the stock exchange, reported revenues of $160 billion during its fiscal year 2024 that ended in may. This is down from $177 billion last year.
Cargill doesn't release quarterly earnings reports, but a memo seen in August stated that less than one third of its businesses achieved their goals for the previous fiscal year.
In the memo, Sikes stated that "impacts on our frontline and operations teams will be kept at a minimum while we empower them so they can continue to deliver for our customers."
Cargill announced in August that it would be making structural changes to its business after failing to meet internal goals. It plans on consolidating operations from five units into three as part of the 2030 strategy.
Sikes announced that the company would hold a meeting to provide more information on the restructuring.
He said that he would be holding meetings this week to inform employees of the next steps in those countries where he could immediately contact them.
Bloomberg News had reported earlier on Cargill's plan to cut jobs.
Cargill's restructuring comes as its competitor Archer-Daniels-Midland faces its own challenges after discovering accounting irregularities and at the same time battling weaker earnings.
Bunge Global, a U.S. grain trader, said in October that it expected to complete the takeover of Glencore's Viterra in early 2025.
(source: Reuters)
