By Tom Polansek
CHICAGO (Reuters) – Global commodities trader Cargill began laying off workers across its massive operations on Tuesday in an effort to reduce its workforce by 5%, sending U.S. workers from supply chain, inventory management and other functions looking for new jobs .
Cargill, a major grain trader and U.S. beef processor, is facing a decline in returns in its beef, grain and oilseed businesses.
In Minnesota, home to its headquarters, Cargill plans to lay off 475 employees at an office center in Wayzata starting Feb. 5, the company said in a letter to government officials. Cargill started informing staff this week about layoffs and they are eligible for severance pay, according to the letter.
Cargill has more than 160,000 employees worldwide and a spokesperson said all operating regions would be affected by cuts.
“The company is facing a cyclical downturn,” said Chris Johnson, director of agribusiness at S&P Global Ratings. “Certainly, their exposure to beef is one reason why they have faced a significant income shortfall.”
Cargill rival Archer-Daniels-Midland, which does not have a beef business, said Tuesday it is trying to control costs as the challenging commodity cycle is likely to continue into 2025.
The cost of cattle has soared for beef processors after drought reduced grazing lands, prompting farmers to reduce the nation’s herd to its smallest size in decades. American meatpacker Tyson Food (NYSE:) said Monday it will close a beef and pork plant in Kansas.
Cargill’s oilseed processing business is also under pressure from uncertain biofuel demand and lower processing margins, analysts said.
Ample supplies of soybeans and corn have pushed commodity crop prices to near four-year lows, boosting the grain processing operations of Cargill, ADM and other rivals such as Bunge (NYSE:).
On LinkedIn, several workers in Costa Rica said they had lost their jobs in talent acquisition. U.S. employees in inventory management, marketing, supply chain analytics and the company’s Digital Technology and Data unit also sought new jobs on the networking site.
Cargill previously said it will undergo structural changes after missing internal profit targets. It reported revenue of $160 billion for the 2024 fiscal year ended in May, compared with a record $177 billion in the previous year.
“We think it’s more of a multi-year process before this strategic change will really impact the company’s profitability,” Johnson said.
