Cargill, the Minneapolis-based company is planning to cut thousands of jobs worldwide, after the company fell short of its profit targets.
The world’s largest agricultural commodities trader will reduce approximately 5% of its 164,000 workforce as part of its 2030 strategy, according to an internal memo, reported Bloomberg.
Revenues slumped for the global commodities trading giant in its most recent fiscal year as crop prices touched multi-year lows.
Agricultural merchants, including Cargill, are under pressure from the low prices of the commodities they trade, such as wheat, corn, and soybeans.
These crops have dropped to near four-year lows and crop processing margins have shrunk, Reuters reported.
Jobs reduction to take place this year
Most of Cargill’s job reductions would take place this year, the company’s president and CEO, Brian Sikes, said in a memo.
Sikes said in the memo:
They will focus on streamlining our organisational structure by removing layers, expanding the scope and responsibilities of our managers, and reducing duplication of work.
Reports also claimed that the cuts will not impact executive-level employees, but will affect several top leaders at the next level.
Cargill told Reuters that the move marks a shift in the company’s strategy, which is 160 years old.
The agricultural trading giant has about 160,000 employees worldwide, and a 5% cut would translate into 8,000 jobs.
“Unfortunately, that means reducing our global workforce by approximately 5%,” according to the memo.
Cargill revenue drop
Cargill, and its trading rivals such as Bunge Global SA and Archer-Daniels-Midland, have witnessed a slump in profits after bumper crops caused corn and soybean prices to plunge.
For Cargill, the fall in revenues has been exacerbated by the smallest cattle herd in the US in 70 years.
Over the last 10 years, the company has aimed to become the third-largest beef processor in the US.
They’ll focus on streamlining our organizational structure by removing layers, expanding the scope and responsibilities of our managers, and reducing duplication of work,” Chief Executive Officer Brian Sikes said in the memo.
Cargill posted a revenue of $160 billion in the fiscal year ended in May, which was significantly lower than the record $177 billion in the previous year.
Cargill job cuts: streamlining operations
Earlier this year in August, Cargill informed its employees that it would streamline its operations.
This meant reducing the business units to three from five after fewer than one-third of its divisions met earnings targets in 2024. According to Reuters, this was part of the company’s 2030 strategy.
“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.
He said:
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.
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