Cargill, the United States' largest privately held company, has announced plans to cut approximately 5% of its global workforce, impacting around 8,000 employees.
This decision comes as the Minneapolis-based agricultural giant grapples with declining profits and shifting market conditions in the food and agriculture industries.
Cargill Announces Layoffs to Streamline Operations Amid Profit Decline
The layoffs are part of Cargill's long-term strategy to streamline its operations and improve efficiency. CEO Brian Sikes, who took leadership in 2023, stated that the company aims to remove redundant roles, expand managerial responsibilities, and better align its operations with current trends.
The decision underscores the company's effort to maintain its competitiveness and continue delivering for its customers in a challenging economic landscape.
Cargill's business has faced headwinds in recent years. After a period of booming profits during the pandemic, the company reported a significant decline in earnings, with profits dropping to $2.48 billion in the fiscal year ending May 2024, TTNews said.
This figure is less than half of its record $6.7 billion profit from 2021-2022 and marks the lowest earnings since 2016. Declining food commodity prices and the smallest U.S. cattle herd in seven decades have further strained its operations, particularly in its beef processing division.
The company, which employs over 160,000 people globally, is also responding to broader changes in the agricultural market. Competitors like Archer-Daniels-Midland Co. and Bunge Global SA have faced similar pressures as bumper crops have driven down prices for key commodities such as corn and soybeans.
Cargill Faces Industry Challenges, Lays Off Workers While Expanding in Tech
In an internal memo, Sikes emphasized the importance of adapting to these challenges by simplifying the company's structure and improving cost management.
He expressed confidence in Cargill's ability to remain a leader in the global food and agriculture sector, stating that the company is focused on becoming "the world's most consequential food and agriculture company" by the end of the decade.
According to CNN, despite the layoffs, Cargill continues to invest in growth areas. Earlier this year, it announced plans to open a technology hub in Atlanta, creating 400 jobs in tech and engineering.
The company has also reduced its business units from five to three, aiming to enhance focus and operational efficiency.
This restructuring reflects the broader challenges facing the food and agriculture industry, where economic pressures and shifting market demands are driving companies to rethink their strategies. As one of the largest players in the sector, Cargill's actions could signal wider changes across the industry.
