As Cargill started laying off thousands of employees last month, the company’s owners made $2 billion from stock buybacks and one-time dividends, according to Fitch Ratings.
The Minnetonka-based agribusiness announced in December it would lay off 5% of its global workforce, or about 8,000 people, as part of a broader restructuring to counter declining profits. About 475 headquarters jobs were eliminated in Minnesota.
At the same time, the private company’s owners — almost entirely members of the billionaire Cargill-MacMillan family — received $500 million from a “special” dividend and a rare $1.5 billion share repurchase completed in December, according to a Fitch Ratings report issued this week. The company last offered a share buyback and special dividend in 2019.
The profit-sharing came even as Cargill’s profits dropped 36% to $2.5 billion in its most recent fiscal year and a majority of the company’s business units missed profit targets, according to Bloomberg.
The company has “abundant liquidity” with $6.8 billion in cash and short-term investments, Fitch reported.
Share buybacks are a common way for companies to reward shareholders by both returning cash to them and raising the value of the remaining stock outstanding. Dividends are one of the only ways some Cargill-MacMillan heirs make money from their ownership stake in the nation’s largest privately held company.
Cargill’s normal annual dividends have averaged $1 billion over the past several years, according to Bloomberg.
Cargill officials declined to comment.