Agricultural giant Cargill to cut jobs as profits plummet

USA – Cargill Inc., a leading player in the global agriculture and commodities sector, has announced plans to cut approximately 8,000 jobs—roughly 5% of its global workforce—citing reduced profits and challenging market conditions. 

The layoffs are part of the company’s strategic plan to streamline operations and address financial setbacks.

The Minnesota-based agricultural giant reported profits of US$2.48 billion for the fiscal year ending May 2024, a stark decline from the US$6.7 billion recorded the previous year. 

Key factors behind the downturn include declining prices for corn and soybeans following bumper harvests and a significant reduction in the U.S. cattle population, which has reached its lowest level in nearly seven decades.

Strategic restructuring

CEO Brian Sikes, in an internal memo, noted that the company aims to simplify its organizational structure by eliminating redundancies and expanding managerial roles. 

While the layoffs will primarily impact middle and senior leadership roles, executive positions are expected to remain unaffected.

The move is consistent with broader restructuring efforts that began earlier this year. Cargill reduced its business units from five to three after less than one-third of its divisions met financial targets for 2024. 

The company also laid off 200 technology-related positions earlier in the year as part of a focused effort to cut costs and improve efficiency.

Market challenges

Cargill has faced a tough market environment after thriving during the pandemic, when rising food commodity prices boosted its earnings. 

However, with inflationary pressures easing and grocery prices stabilizing, the company is grappling with declining demand. In particular, its beef processing operations have been hit hard by the dwindling U.S. cattle herd.

The U.S. Department of Agriculture has highlighted that the current cattle population is at its smallest since the 1950s, affecting supply chains and profitability for major players like Cargill.

Investments in innovation

Despite workforce reductions, Cargill is continuing to invest in growth and innovation. Earlier this year, the company announced the creation of a new technology hub in Atlanta, which is expected to generate 400 jobs in tech and engineering. 

This initiative highlights Cargill’s efforts to adapt to evolving market trends while maintaining its commitment to innovation.

“Cargill can be the world’s most consequential food and agriculture company. And before the end of this decade, we will,” CEO Sikes emphasized the company’s long-term vision in a statement.