Cargill, the massive Minnesota-based food production company, is laying off approximately 5% of its global workforce due to a decline in food commodity prices.
As America’s largest privately held company and the world’s largest agricultural commodities trader, Cargill has seen significant success. The company explained that the layoffs are part of a “long-term strategy” implemented earlier this year.
Cargill plays a major role in the ingredients business, acting as a key distributor of grains, meat, and other agricultural products worldwide. The company had profited substantially during the pandemic and its aftermath, driven by inflation and geopolitical instability that caused food prices to rise.
However, with grocery prices now falling, Cargill is adjusting to the changing market conditions.
The number of cattle in the U.S. has decreased, according to the U.S. Department of Agriculture, and Cargill, which has heavily invested in becoming one of the largest beef processors in North America, is feeling the impact.
Earlier this year, it was reported that Cargill’s profits had dropped to $2.48 billion for the fiscal year ending in May, less than half of the $6.7 billion it earned in 2021-2022. This marked the company’s lowest profit since 2016.
Cargill, which employs over 160,000 people according to its 2024 report, is planning to cut approximately 8,000 jobs as part of its restructuring. The company, which is known for its secrecy, does not frequently release financial updates. Brian Sikes, who became the president and CEO in 2023, is overseeing these changes.
In June, Cargill revealed plans to open a new hub in Atlanta and hire 400 tech and engineering professionals.
The company stated, “As we look ahead, we have developed a clear strategy to evolve and enhance our portfolio, capitalize on emerging trends, improve our competitiveness, and, most importantly, continue to meet the needs of our customers.”