The company reported revenue of US$160 billion for this fiscal year, down from a record $177 billion the previous year
REUTERS — Cargill plans to cut around five per cent of its staff, or about 8,000 jobs, after revenue slumped in its most recent fiscal year as crop prices hit multi-year lows.
Agricultural merchants, including privately held Cargill, are under pressure as prices of the commodity crops they trade, such as wheat, corn and soybeans, have dropped to near four-year lows and crop processing margins have shrunk.
Most of Cargill’s job reductions would take place this year, president Brian Sikes wrote in a memo.
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“They will focus on streamlining our organizational structure by removing layers, expanding the scope and responsibilities of our managers and reducing duplication of work.”
The move is part of a shift in strategy at the nearly 160-year-old company, Cargill said, when asked about the memo.
“Unfortunately, that means reducing our global workforce by approximately five per cent,” it said.
The Minnesota-based company has more than 160,000 employees, which implies that a five per cent cut in staff would hit about 8,000 jobs.
Cargill, which is unlisted, reported revenue of US$160 billion for its 2024 fiscal year that ended in May, down from a record $177 billion the previous year.
The company does not release quarterly earnings statements, but in a memo seen by Reuters in August, it said less than one-third of its businesses met their earnings goals in the last fiscal year.
“Impacts to our operations and frontline teams will be kept to a minimum as we empower them to continue delivering for our customers,” Sikes said in the memo.
The move comes after Cargill said in August it would undergo structural changes after missing internal earnings goals, with plans to streamline operations into three units from five as part of its 2030 strategy.
Sikes said the company will hold a meeting on Dec. 9 to share more information about the restructuring.
“This week, for those in countries where we can immediately communicate to employees whose roles are impacted, we’ll set up meetings to explain next steps,” he said.
Cargill’s restructuring comes as competitor Archer Daniels Midland faces its own challenges after discovering accounting irregularities and at the same time battling weaker earnings.
Meanwhile, after months of tackling competition regulators, including in Canada and China, Bunge Global said in October it expects to complete its takeover of Glencore-backed Viterra by early 2025.
