Agricultural processor Archer Daniels Midland said Wednesday it would reduce its workforce by three per cent, making it the latest agribusiness giant to make cuts in the face of volatile global markets.
Chicago-based ADM said it will eliminate about 1,000 positions worldwide "to enhance the cost structure of the company," estimating the cuts and "other targeted cost reductions" will reduce its annual pre-tax expenses by more than US$100 million when they are fully implemented.
It joins agribusiness Cargill in making cuts. Cargill in December said it will cut 1.5 per cent of its staff.
"To ensure that we can continue to compete effectively in our global markets, we are taking actions to streamline our organization and achieve significant, sustained cost reductions," said ADM CEO Patricia Woertz.
An ADM spokesman did not immediately respond to a request for more details.
ADM’s holdings across Canada include seven wheat milling operations, two livestock feed premix processing plants, two oilseed crushing plants (each supplied by two ADM elevators) and two chocolate-processing plants.
The company said in a statement it expected to begin benefitting from cost reductions in the fourth quarter of fiscal year 2012. It projected the full benefit will be seen by the end of the third quarter of fiscal 2013.
The cuts come on the heels of disappointing results issued Tuesday by Cargill. The company revealed a third consecutive slump in earnings and said the quarter ended Nov. 30 was its worst quarter since 2001.
Cargill singled out its trading operations as dragging down stronger earnings in its food and agricultural services divisions, saying Europe’s debt crisis had hurt equity and distressed-asset trades in its hedge fund division. Sugar trading also recorded a loss.
Canada’s biggest grain handler, Viterra, will report solid fourth-quarter results next week and, unlike ADM and Cargill, has no plans to reduce its workforce, CEO Mayo Schmidt said Wednesday.
In an interview with Reuters, Schmidt also said Viterra is briskly signing forward contracts to buy and sell 2012 western Canadian wheat and barley.