Cargill has announced that it is to cut up to 2,000 jobs – around 1.5% of its workforce. The Minnesota-based company cited the continuing weak global economy as the reason for its decision.
Over the weekend, Cargill said it would reduce its 138,000 workforce over the next six months. The reduction in force will not be applied evenly across the company, with cuts being greater in Cargill’s poorer-performing businesses.
“As economic conditions change, so must we,” said Mike Fernandez, corporate vice president of Cargill Corporate Affairs. “These are difficult decisions but are necessary to better position the company for continued growth.” The company had previously (quarter ended August 2011) reported earnings down by 66%, noting the impact of economic uncertainty and the volatility of commodity markets.
Of the announcement the Financial Times said, “It is too early to say whether Cargill’s bearishness is justified. But it is worth noting that Cargill is a privately-owned company – still controlled by the MacMillan and Cargill families, descendants of the founders who set up the group in 1865 – so it does not feel obliged to put as brave a face on in a bad economic environment as its publicly-listed rivals.”
Cargill has for some time been publicly voicing its concerns about the worldwide economic situation. Analysts point out that the diverse nature of Cargill’s commodity trading business gives it an unusually acute insight into a variety of world markets – again, reinforcing the credibility of its public pronouncements. Other commodity traders have been more bullish.