Cargill, the world’s largest agricultural commodities trader, has announced it will cut approximately 5% of its global workforce, equating to around 8,000 jobs, as part of a significant restructuring effort.
This decision comes after the company reported a decline in revenues, largely due to falling crop prices.
The Minneapolis-based company, which has over 164,000 employees worldwide, attributed the move to a need to streamline operations and improve profit margins in the face of shifting market conditions. Cargill’s restructuring will consolidate its operations into three core divisions—food enterprise, agriculture and trading, and specialized portfolio—down from five divisions.
In a statement released on Monday, Cargill expressed its commitment to evolving its portfolio to remain competitive and deliver for customers, but noted that realigning its talent and resources was necessary to implement the company’s strategy.
“Unfortunately, that means reducing our global workforce by approximately 5%. This difficult decision was not made lightly,” the company said.
Cargill’s restructuring comes after a drop in revenues for the fiscal year ending in May 2024, which fell to $160 billion, down from $177 billion in the previous year. The company also faced challenges in the beef sector, where drought conditions in the US have led to a smaller national cattle herd, further squeezing margins in its meatpacking operations.
The company’s workforce reduction and organizational changes are part of a broader effort by Cargill’s CEO, Brian Sikes, who took the helm in early 2023. Sikes had previously outlined plans to streamline operations and focus on key areas to address market dynamics, including the low crop prices that have led to diminishing profits for agricultural traders. Cargill’s profits for the year ending in May 2024 fell to $2.48 billion, the lowest since 2015-2016, according to Bloomberg.
Cargill, which has been a key player in the global food commodities market, competes with other major traders like Archer Daniels Midland and Bunge. While these companies benefited during the pandemic and the volatility caused by the 2022 Russian invasion of Ukraine, the current market conditions, including lower crop prices and global supply surpluses, have significantly impacted their profit margins.
Cargill’s restructuring is set to affect its global operations, but the company is aiming to minimize impacts on frontline teams. The company plans to communicate with employees about the changes starting this week and will hold a meeting on December 9 to provide further details on the restructuring.
With input from Reuters and the Financial Times.
