ADM becomes latest agribusiness giant to cut jobs
By Tom Polansek
CHICAGO (Reuters) - Agricultural processor Archer Daniels Midland Co said on Wednesday it will reduce its workforce by 3 percent, making it the latest agribusiness giant to make cuts in the face of volatile global markets.
ADM said it will eliminate about 1,000 positions worldwide in the first broad reduction in company history. It estimates the job cuts and other cost reductions will eventually reduce the company's annual pre-tax expenses by more than $100 million.
ADM rival Cargill also has cut jobs to save money at a time when the world's top commodity trading houses and processors are under pressure. Cargill said last month it will eliminate 1.5 percent of its staff, or about 2,000 people.
"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 Patricia Woertz, ADM chairman and chief executive officer.
Commodity trading firms and processors have struggled as volatile markets have increased the risks and costs.
Top agricultural traders often prosper during volatile times by using their vast global networks to exploit opportunities. However, merchandisers were sometimes caught flat footed by swings in crop prices this fall, when markets were driven by the euro zone crisis, not by supply and demand.
For trading houses, a major concern is a decline in financing from lenders due to the euro zone crisis, said Shelley Goldberg, director of commodities and global resources strategy for Roubini Global Economics. Less lending means less business for trading firms, she said.
"If your expectations for sales are not good, you're going to hone in and sit on cash and perhaps cut employees," she said Continued...