Dive Brief:
- Agribusiness giant Cargill is slashing 5% of its global workforce in an effort to streamline operations after reporting a rare decline in profits earlier this year.
- The job cuts will affect an estimated 8,000 workers. In a statement to sister publication Agriculture Dive, Cargill said layoffs were necessary for the company to take advantage of changing trends in agriculture as it looks to "evolve and strengthen our portfolio."
- Cargill reported $160 billion in annual revenue in 2024, close to a 10% drop from the previous year. In August, the company outlined plans to consolidate operations after less than one-third of its businesses met their earnings goals, Reuters previously reported.
Dive Insight:
Tumbling global crop prices have pressured earnings at Cargill and other commodity traders including Archer-Daniels-Midland. As a broader economic downturn in the agricultural sector hits all parts of the industry, Cargill's other businesses — including its vast meat processing operations — have also suffered.
Cargill has consolidated its agricultural footprint this year both in crops and meat as a shortage of U.S. cattle continues to squeeze margins. Competitor Tyson Foods announced Monday it would close three U.S. plants, affecting 1,000 workers.
Since February, Cargill has laid off manufacturing workers at a Nashville beef plant, sold a California beef processing facility and offloaded a dry sausage plant to competitor Smithfield. Cargill also sold eight grain facilities to agribusiness CHS.
CEO Brian Sikes wrote in a letter to stakeholders in August that the company is navigating an "extremely challenging" year. Cargill's revenue slump broke a two-year streak of record earnings, and represented the lowest profit levels in close to a decade.
"As we look to the future, we have laid out a clear plan to evolve and strengthen our portfolio to take advantage of compelling trends in front of us, maximize our competitiveness, and, above all, continue to deliver for our customers," a Cargill spokesperson said in a statement to sister publication Agriculture Dive. "To strengthen Cargill’s impact, we must realign our talent and resources to align with our strategy.”
