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Diving overview:
- Agricultural giant Cargill will cut 5% of its global workforce in an effort to streamline its operations after reporting a rare drop in profits earlier this year.
- The job cuts will affect approximately 8,000 workers. In a statement to Agriculture Dive, Cargill said the layoffs were necessary for the company to take advantage of changing agricultural trends to “evolve and strengthen our portfolio.”
- Cargill reported annual sales of $160 billion in 2024, down nearly 10% from the previous year. Reuters previously reported that the company announced plans to consolidate its businesses in August after less than a third of its businesses met profit targets.
Dive Insights:
Plummeting global grain prices have put pressure on the profits of Cargill and other commodity traders, including Archer-Daniels-Midland. Cargill’s other businesses, including its large-scale meat processing operations, have also suffered as the broader economic downturn in the agricultural sector has affected the industry as a whole.
Cargill has consolidated its agricultural divisions in both crops and meat this year as a shortage of U.S. cattle continues to pressure margins. Rival Tyson Foods announced Monday it would close three U.S. plants, affecting 1,000 workers.
Since February, Cargill has laid off manufacturing workers at its Nashville beef plant, sold its California beef processing facility and moved a dry sausage plant to rival Smithfield. Cargill also sold eight grain facilities to agribusiness company CHS.
In a letter to stakeholders in August, CEO Brian Sikes wrote that the company was having an “extremely difficult” year. Cargill’s sales slump has broken profit records for the second straight year and resulted in the company’s lowest profit levels in nearly a decade.
“As we look to the future, we have a clear plan to evolve and strengthen our portfolio to capitalize on the powerful trends ahead of us, maximize our competitiveness and, most importantly, continue to serve our customers.” A Cargill spokesperson said in a statement to Agriculture Dive: “Strengthening Cargill’s impact requires realigning our talent and resources to align with our strategy.”
