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By Natalie Venegas
Weekend Reporter
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Agricultural business Cargill has announced a sweeping reduction of its workforce, which will lay off thousands of employees.
Who Will the Layoffs Impact?
While it did not immediately provide further specifics around the layoffs, Cargill is set to reduce its global workforce by about 5 percent. Around 8,000 employees could be impacted based on the company's 2024 annual report that noted it had over 160,000 employees worldwide.
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The Minnesota-based agribusiness titan shared with a statement with The Associated Press published on Tuesday that said the decision, confirmed this week, was part of a long-term strategy "to strengthen Cargill's impact," which includes realigning resources.
"As the world around us changes, we are committed to transforming even faster to deliver for our customers and fulfil our purpose of nourishing the world," Cargill said. The company added that its workforce reductions are a result of a "difficult decision (that) was not made lightly."
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The job cuts, however, have not been extended to Cargill's executive team, though a number of senior leaders will reportedly be affected, according to Bloomberg, which first reported on Cargill's layoffs Monday, citing Citing unnamed sources familiar with the matter.
According to the internal memo obtained by Bloomberg, Chief Executive Officer Brian Sikes told employees that the majority of these reductions will take place this year.
The Industry Shifts and Economic Pressures
The layoffs come during a challenging period for the agricultural sector with declining commodity prices. Key staples such as wheat and vegetable oil have seen costs tumble from the record highs reached during the COVID-19 pandemic and geopolitical disruptions like Russia's invasion of Ukraine.
While grocery bills for consumers remain elevated compared to pre-pandemic levels, the easing of commodity prices has squeezed margins for food giants, intensifying challenges for industry leaders like Cargill.
Although Cargill, a privately-held company, doesn't regularly publish its finances publicly, a 2024 report from the company rakes in $160 billion in annual revenue. This figure marks a decline from $177 billion the previous year.
The company, operating across 70 countries and serving 125 markets, has historically been a dominant player in the agribusiness sector.
Despite recent revenue declines, Forbes recently reaffirmed Cargill's standing as the largest private company in the United States, which marks the fourth consecutive year the company has held this title and the company's 37th time overall since Forbes began its rankings in 1985.
This article includes reporting from The Associated Press.
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