Grain Prices Hit Lowest in 4 Years Amid Margin Pressure
Cargill, the world's largest grain company, plans to lay off 5% of its global workforce, Bloomberg News reported on the 2nd (local time).
According to internal documents obtained by Bloomberg, Cargill has approximately 164,000 employees, of which about 8,000 will be subject to layoffs. In a statement sent to CNN Business on the same day, Cargill explained that this measure is part of the "long-term strategy" set earlier this year.
Brian Sikes, Cargill's Chief Executive Officer (CEO), stated in the document, "Most of the workforce reductions will take place this year," adding, "We will focus on simplifying the organizational structure by removing layers, expanding managers' scope and responsibilities, and reducing overlapping tasks."
Cargill is one of the world's largest trading companies distributing grains, meat, and agricultural products globally. Having earned significant profits amid inflation and geopolitical crises caused by the pandemic, Cargill is now facing margin pressures as prices for wheat, corn, and soybeans have fallen to their lowest levels in four years due to a recent bumper harvest. Additionally, despite investments made to become the largest beef processor in North America, adverse factors such as the U.S. cattle herd dropping to its lowest level in 70 years have compounded challenges.
Earlier, Bloomberg reported that Cargill's net profit for the 2024 fiscal year, which ended in May, was $2.48 billion (approximately 3.48 trillion KRW), marking its worst performance since 2016. This figure is less than half of the $6.7 billion net profit recorded in the 2021-2022 fiscal year.
In its statement, Cargill emphasized, "We have developed a clear plan to leverage attractive trends ahead, maximize competitiveness, and above all, ensure continuous supply for our customers by evolving our portfolio." Earlier, Cargill announced that it opened a tech office in Atlanta in June and plans to hire 400 technology and engineering positions.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
