Grain processing giant Archer Daniels Midland (ADM) has said it will lay off about 20% more employees than previously announced, bringing the total number to about 1,200 or 4% of its global workforce.
ADM said last month that it would cut 1,000 jobs, as part of an effort to save about $100m a year. Its new plan is expected to create additional savings, bringing the total to about $125m, the company said.
Speaking at the CAGNY (Consumer Analyst Group of New York) conference on Tuesday, ADM chairman and CEO Patricia Woertz said the additional cutbacks included layoffs associated with the closure of a North Dakota ethanol plant and a soybean processing plant in Illinois.
“In January, we announced an initiative to reduce our global work force by 3% or approximately 1,000 positions, and those were primarily salaried positions,” Woertz said.
“We now have completed our voluntary retirement program and we are in the process of reviewing our position reductions in addition to those voluntary retirements, and we now expect the combination of those, in addition to the plant closures that we announced a little earlier, that we will be reducing our work force by 4% or about 1,200 positions.”
She added: “We estimate the charge that we will take to do this will be at the top end of the range that we had announced, which was $50m-$75m, and the expected annual pretax savings, we had said about $100m, and we expect it to exceed $125m.”
The company expects to begin to see the first savings related to the job cuts in the fourth quarter of this fiscal year, and to see the full cost reduction benefit by the end of the next fiscal year, Woertz said.
ADM has been grappling with volatile commodity costs, and reported an 89% slump in second quarter profits to December 31, even though sales had grown.
It is not the only company in the sector to feel the effect of cost pressures. In December, privately-held Cargill said it would cut about 2,000 jobs, or about 1.5% of its global workforce, before reporting an 88% drop in quarterly profits last month.