July 21, 2024

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Tyson Foods will cut 10% of corporate jobs and 15% of senior leaders

Tyson Foods will cut 10% of corporate jobs and 15% of senior leaders

CHICAGO (Reuters) – Chief Executive Officer Donnie King told employees on Wednesday that Tyson Foods Inc. (TSN.N) will cut about 10% of its corporate jobs and 15% of its senior leadership positions.

The layoffs are the latest cost-cutting move for the largest US meat company by sales as it grapples with slumping profits and struggles to improve results in its popular chicken business.

In a note to employees, seen by Reuters, King said discussions with the hardest-hit employees are scheduled for this week. The shares closed down 1.1% at $60.35 on Wednesday.

“We will drive efficiency by focusing on fewer initiatives with greater intensity and eliminating duplication of work,” King said.

Tyson had about 6,000 American employees working in corporate offices as of Oct. 1 and 118,000 workers in non-corporate locations such as meat plants and warehouses, according to regulatory filings.

A company spokesperson said the eliminated roles in senior leadership are mostly vice presidents and senior vice presidents.

Some of the companies’ employees have already quit after Tyson said in October that it would move all of the company’s jobs to its Springdale, Arkansas, headquarters. A company spokesperson said the 10% reduction in company roles is not due to employees leaving the company rather than moving to Arkansas.

A recent overhaul in Tyson’s executive leadership has some investors and analysts worried.

The company fired Chris Langholz as its head of international business in August. In September, Tyson said that Noelle O’Mara, who led the prepared foods division, had left the company. John R. Tyson, grandson of the company’s founder, took over as CFO.

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“Frequent changes in the leadership team over the past few years indicate inefficiencies within the company’s offices,” said Arun Sundaram, chief equity analyst at CFRA Research.

In January, Tyson replaced the head of the poultry division after the company incorrectly forecast demand for chicken.

The company has struggled for years to improve results in its chicken business, and said in March it would close two processing plants in the United States that employ nearly 1,700 employees.

Meatpacking manufacturers have generally increased factory workers’ wages during the pandemic. Analysts said they now face declining operating margins and must increasingly compete to buy livestock to run plants at full capacity.

“Margins are ripping apart like this and it’s like we’re really hemorrhaging right now,” said Bob Brown, an independent livestock market expert.

Tyson’s adjusted earnings of 85 cents per share in the quarter ended December 31 were down 70% from a year earlier. The company is scheduled to report its next quarterly results on May 8.

Reporting by Tom Polancic

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