Archer Daniels Midland said it would cut 1,000 jobs, reacting on the challenges faced by the agribusiness sector as market volatility cuts into trading profits.
The cuts, which amount to 3% of the company's work force, aim to trim annual expenses by $100 million a year. They are part of what a spokesman said was a broader effort to boost the US group's international competitiveness.
ADM said the cuts would initially take the form of a voluntary retirement offer to US salaried staff, with job losses overseas following, dependant on how many take the offer.
The move announced yesterday also comes as there is simmering discontent among investors about ADM's performance after a big expansion of its renewable-fuels business under CEO Pat Woertz, a former Chevron executive, and subsequent investment in overseas grain-processing and handling.
While the commodities boom has made agribusiness one of the more resilient sectors of the economy, ADM's action follows last month's announcement by larger rival Cargill of plans to cut 2,000 jobs, or about 1.5% of its global staff.
Grain merchandisers generally gain from volatility as their network of traders and sources allows them to capitalize early on market trends through trading.
But that advantage was nullified throughout the autumn because price swings were based on the latest news about Europe's crisis, rather than shifts in grain supply-and-demand fundamentals.
Like Cargill, ADM also has suffered from poor soybean-export-processing margins due to US overcapacity and sluggish demand thanks to the weak economy.
High corn prices have added to the pressure on ADM the past several months as margins in its corn-processing business eroded.
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