By Amy Lv, Naveen Thukral and Tony Munroe
(Reuters) -Global trading house Cargill said on Tuesday it plans to cut about 5% of its workforce, or about 8,000 jobs, after sales fell in the most recent fiscal year as crop prices hit multi-year lows .
Agricultural traders, including privately held Cargill, are under pressure as prices of the staple crops they trade, such as wheat, corn and soybeans, have fallen to nearly four-year levels and margins on crop processing have shrunk.
Most of Cargill’s job cuts would come this year, the company’s president and CEO Brian Sikes said in a memo reviewed by Reuters on Tuesday.
“They will focus on streamlining our organizational structure by removing layers, expanding the scope and responsibilities of our managers and reducing duplication of effort,” Sikes said in the memo.
The move is part of a change in strategy at the nearly 160-year-old company, Cargill said when asked about the memo.
“Unfortunately, this means we will have to reduce our global workforce by approximately 5%,” the report said.
Minnesota-based Cargill has more than 160,000 employees, implying that a 5% workforce reduction would affect about 8,000 jobs.
Privately held Cargill reported revenue of $160 billion for the 2024 fiscal year ended in May, compared with a record $177 billion in the previous year.
Cargill doesn’t release quarterly earnings, but a memo seen by Reuters in August said less than a third of its businesses met their profit targets in the last fiscal year.
“The impact on our operations and frontline teams will be minimized as we enable them to continue delivering to our customers,” Sikes said in the memo.
The move comes after Cargill said in August it would undergo structural changes after missing internal profit targets, with plans to streamline operations from five to three units as part of its 2030 strategy, Reuters reported in August.
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 with employees whose roles are affected, we will organize meetings to explain the next steps,” he said.
Bloomberg News previously reported Cargill’s job cuts plan.
