Cargill, one of the world’s largest agricultural trading companies, has announced it will lay off 475 employees at its headquarters in Minnesota as part of a global restructuring effort. The layoffs began on February 5, 2024, as the company struggled with declining revenue and tightening profit margins.

Impact on Minnesota Employees

The affected employees work at Cargill’s Wayzata office or are linked to the facility but live elsewhere. These workers will receive severance packages and outplacement services to assist in finding new jobs, according to a letter the company sent to the Minnesota Department of Employment and Economic Development. The letter also noted that the impacted roles are not represented by a union.

The layoffs are part of a broader strategy to cut approximately 5% of Cargill’s workforce, which equates to around 8,000 jobs globally. Cargill employs over 160,000 people worldwide and is headquartered in Minnesota, where it has deep roots and serves as a major employer.

Challenges in the Agricultural Sector

Cargill’s decision comes as the agricultural industry faces significant challenges. Prices for major crops like wheat, corn, and soybeans have fallen to their lowest levels in four years, while crop processing margins have also tightened. These economic pressures have weighed heavily on agricultural merchants like Cargill, which relies on trading and processing these commodities for much of its revenue.

The company’s revenue for its 2024 fiscal year, which ended in May, dropped to $160 billion from a record $177 billion the previous year. In an internal memo shared in August, Cargill revealed that less than one-third of its business units met their earnings goals during the fiscal year.

Restructuring to Navigate Declining Revenues

In its letter, Cargill described the layoffs as part of a broader restructuring effort aimed at streamlining its business operations. “Cargill is restructuring its business, leading to job reductions at the Wayzata Office Center,” the company stated.

Cargill Profits Drop, Leading to Layoffs

Cargill’s annual profits fell 36% this year to $2.5 billion, a big drop from the $6.7 billion it earned two years ago during the pandemic’s peak in commodity prices

The company has not disclosed specific details about which departments will be most affected, but the restructuring reflects Cargill’s need to adapt to changing market conditions. Unlike publicly traded companies, Cargill does not release quarterly earnings reports, making this announcement one of the few insights into its financial health.

Despite these challenges, Cargill remains a global powerhouse with operations spanning food, agriculture, and risk management. The company will continue to adapt its business model as it navigates the economic pressures facing the agricultural industry.