Monsanto will cut 2,600 jobs from global workforce
Monsanto announced Wednesday it would shed 2,600 employees in the next 18 to 24 months as the company deals with declining seed sales.
The seed giant reported a $495 million loss, or about $1.06 per share, for its fiscal fourth quarter.
It’s not clear how many jobs will be affected at its Creve Coeur-based headquarters. The cuts represent about 12 percent of Monsanto’s workforce, and spokeswoman Sara Miller said they will take place globally across all functions.
"We’re currently evaluating our organizational needs and will be making initial changes to our global workforce over the coming months," Miller said in an emailed statement. "I’d also note that during this time, we will continue to add roles where needed to hire for the skills and experience needed to grow the company for the future."
Low corn prices are putting pressure on the company’s best-selling product, genetically-modified corn seeds. The sale of those seeds fell from $630 million last year to $598 million this year, or about 5 percent. The company's agricultural productivity unit, led by Roundup weed killer, also fell about 12 percent to $1.1 billion.
"When you narrow the lens to the next 12 months, the industry continues to face a challenging macro environment and we’ve moderated our outlook," said CEO Hugh Grant in an earnings conference call.
The company estimates its earnings per share for the new fiscal year, which began last month, will be $5.10 to $5.60. That falls below many analysts' expectations of more than $6.00.
The layoffs will save the company an estimated $275 to $300 million annually. The restructuring will cost an estimated $850 to $900 million. Monsanto said it will also work to cut operating costs by $100 million a year.
Monsanto also announced it would buy back stock worth $3 billion over the next six months. The move came after Monsanto abandoned its efforts to acquire Swiss pesticide producer Syngenta.
The company said it’s still on target to double fiscal 2014 earnings per share by 2019.
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