Minnetonka-based Cargill to lay off about 8,000 people, 5% of global workforce

Cargill is cutting 5% of its global workforce — about 8,000 jobs — as the commodities giant grapples with the comedown from a few record-breaking years during the pandemic.

The nation’s largest privately held company is already undergoing a corporate restructuring announced earlier this year after annual profits fell to their lowest level in nearly a decade. Cargill is looking to buoy its margins and “maximize [its] competitiveness” by cutting costs as part of a 2030 plan.

“To strengthen Cargill’s impact, we must realign our talent and resources to align with our strategy. Unfortunately, that means reducing our global workforce by approximately 5%,” the company said in a statement. “This difficult decision was not made lightly. We will lean on our core value of putting people first as we support our colleagues during this transition.”

Layoffs will occur across the company’s global footprint and at all levels. Cargill will cut about 475 in-person and remote jobs at the company’s Minnetonka headquarters. The company will notify affected workers this week with terminations beginning in February, according to a state filing.

Outside of divestitures and acquisitions, the mass layoff is the largest since Cargill announced 2,000 job cuts late in 2011. The job losses in the Twin Cities are the largest since the outsourcing of local IT jobs in 2014.

Cargill will announce most job cuts before the end of the year, said CEO Brian Sikes in an internal memo Reuters obtained Monday.

“They’ll focus on streamlining our organizational structure by removing layers, expanding the scope and responsibilities of our managers and reducing duplication of work,” Sikes wrote.

Cargill’s profits fell 36% to $2.5 billion in the most recent fiscal year, according to Bloomberg. That follows a record-setting $6.7 billion haul two years ago as the trading house capitalized on high commodity prices.

Grain prices have since dropped markedly. Fellow ag companies like CHS and ADM have also reported higher costs to move and process food, denting profits.

“The global commodity landscape has continued to shift. Stronger-than-expected supply has driven commodity prices down further than anticipated,” ADM Chief Executive Juan Luciano told analysts Tuesday morning.

New tariffs being proposed by incoming President Donald Trump could disrupt U.S. farm trade even more.

After revenue fell for the first time in years and a majority of the company missed profit targets, Cargill began reorganizing from five to three business units in August. Sikes told employees at the time: “Our recent performance and the market trends unfolding in front of us have proven a clear and pressing case for change.”

Recent profits are in line with pre-pandemic trends, though the company has added roughly 10,000 employees since 2017. The global headcount is now about 160,000.

While agribusinesses routinely ride waves of high and low crop prices, the abrupt reorganization and layoffs might point to deeper problems with Cargill’s cash-flow projections through the end of the decade.

Sikes promised to “streamline and simplify the organization” with the restructuring, which could also result in selling off parts of Cargill’s portfolio. The CEO is in his second year leading the 160-year-old company, an ag trader, food processor and one of the world’s largest meatpackers, with operations in 70 countries.

In addition to a number of environmental pledges the company has promised to fulfill by 2030, Sikes has now staked his legacy on making Cargill a reliable growth engine by 2030.

“Cargill can be the world’s most consequential food and agriculture company,” he wrote in this week’s memo, according to Bloomberg. “And before the end of this decade, we will.”

This story contains material from Reuters.