One of the giants in the seed and crop input industry is looking to cut costs as it responds to slumping sales.
In its year-end and fourth quarter report published Wednesday, Monsanto said it will cut approximately 2,600 employees — approximately 12 percent of its workforce — in the next 18 to 24 months.
The company reported a net loss of $495 million, or $1.06 a share, in its fiscal fourth quarter. Sales dropped to $2.4 billion from $2.6 billion in the same quarter last year. Expectations were for sales closer to $2.8 billion. “Foreign currency headwinds, declining corn acres and declines in glyphosate pricing” were cited as reasons for declining net sales.
“The fundamentals of our business are strong and Monsanto remains the best positioned company in the industry. As we look to 2016, focus and discipline become increasingly important,” said CEO Hugh Grant in a statement. “We will continue to focus on executing on key milestones within our core seeds and traits business, and we plan to remain disciplined in our agricultural productivity strategy, drive further optimization in spend through strategic restructuring actions and accelerate our progress toward our targeted capital structure.”
The company says it expects to see growth in 2016 led by new corn hybrid introductions and adoption of Intact RR2 PRO soybeans. Monsanto will also exit the sugarcane business, while streamlining and reprioritizing commercial and R&D efforts. While launch costs will likely still factor into the books for 2016, the introduction of the Roundup Ready Xtend Crop System is expected to help the company’s bottom line in 2017.