Cargill, the world’s largest agricultural commodities trader, has announced plans to cut approximately 5% of its global workforce, equivalent to thousands of employees, following a significant shortfall in profit targets. This restructuring, part of the company’s 2030 strategy, aims to streamline operations and boost efficiency, according to an internal memo cited by Bloomberg.
The workforce reductions will predominantly affect senior leaders below the executive team, with a focus on simplifying organizational structures, expanding managerial responsibilities, and minimizing redundancy. Chief Executive Officer Brian Sikes emphasized that most of these changes will occur this year as part of a broader effort to enhance competitiveness and adapt to market challenges.
Cargill’s struggles are mirrored by its competitors, including Bunge Global SA and Archer-Daniels-Midland, as bumper crops have driven down prices for key commodities like corn and soybeans. Additionally, Cargill has been hit hard by the smallest U.S. cattle herd in 70 years, affecting its beef processing business, where it is the third-largest player in the country.
Earlier in 2024, the company restructured its operations, reducing the number of business units from five to three, after fewer than one-third of its divisions met earnings targets. This was followed by layoffs of around 200 tech employees. Cargill’s annual profits fell to $2.48 billion for the fiscal year ending in May 2024, marking the lowest figure since 2015-16 and less than half of its record $6.7 billion profit in 2021-22.
Despite these setbacks, Cargill reaffirmed its commitment to repositioning itself for long-term success. “We have laid out a clear plan to evolve and strengthen our portfolio to take advantage of compelling trends in front of us, maximize our competitiveness, and continue to deliver for our customers,” the company said in a statement.
This move highlights ongoing turbulence in the global agricultural commodities sector, with Cargill seeking to navigate shifting market dynamics and maintain its leadership position.
