Cargill, the world’s largest agricultural commodities trader, has announced a sweeping workforce reduction, cutting 8,000 jobs globally amid a sharp decline in profits and a collapse in commodity prices. The layoffs represent 5% of the company’s 164,000 employees and mark one of the most significant workforce reductions in the company’s history.
A Restructuring Move to Combat Declining Profits
The Minnesota-based agribusiness giant revealed the cuts as part of a broader strategy to streamline operations and adapt to rapidly changing market conditions. In a statement, the company described the decision as “difficult” but essential to its long-term goals. “We are committed to transforming even faster to deliver for our customers and fulfill our purpose of nourishing the world,” the statement read.
The restructuring follows a steep financial downturn. Cargill reported $160 billion in revenue for its 2024 fiscal year, a 10% decrease from the $177 billion it earned the previous year. Profits plummeted to $2.5 billion, the company’s lowest earnings since 2015-16, far from the $6.7 billion peak recorded in 2021-22.
Mounting Pressures in a Shifting Market
Global commodity price declines have hammered Cargill’s profit margins. Prices for key crops such as wheat, corn, and soybeans have dropped to their lowest levels in nearly four years, while a shrinking U.S. cattle herd—the smallest in 70 years—has squeezed the company’s beef processing operations.
The challenges are not unique to Cargill. Competitors like Bunge Global SA and Archer-Daniels-Midland Co. have faced similar pressures, reflecting broader turmoil in the agricultural sector.
Earlier this year, Cargill began consolidating its business units, reducing them from five to three after less than one-third of its divisions met their earnings targets for 2024. The company also eliminated 200 technology jobs as part of a broader effort to realign resources.
Layoffs Target Senior Leadership Roles
An internal memo from Cargill CEO Brian Sikes outlined the rationale for the layoffs. “We will focus on streamlining our organizational structure by removing layers, expanding the scope and responsibilities of our managers, and reducing duplication of work,” Sikes wrote. While the executive team remains unaffected, senior leadership roles below the executive level are included in the cuts.
Sikes, who became CEO in 2023, now faces the challenge of navigating the company through one of its most turbulent periods.
Cargill’s Continued Global Influence
Despite its challenges, Cargill remains a global powerhouse, operating in 70 countries and serving 125 markets worldwide. The company has been named the largest privately held company in the United States by Forbes for 37 consecutive years, underscoring its vital role in the global economy.
As Cargill presses forward with its restructuring plan, it aims to evolve and strengthen its portfolio to seize future opportunities. “We have laid out a clear plan to maximize our competitiveness and continue to deliver for our customers,” the company stated.
The layoffs, however, signal a critical moment in the company’s history, reflecting both the volatility of global markets and the necessity for adaptation in a rapidly changing world.