Monsanto, the agriculture and biotech giant, said Wednesday it will cut 2,600 jobs in a bid to restructure and save on costs.
The company, which is based in St.Louis, plans to slash the jobs over the next 18 to 24 months. The move comes amid flagging corn-seed sales and an earnings forecast well below analysts’ expectations.
In a release announcing fiscal year 2015 results, Monsanto (MON) said that cutting the jobs would save millions: “The initial phase is expected to lead to annual savings of $275 to $300 million by the end of fiscal year 2017, at a total cost of approximately $850 to $900 million. The plans also include an expected separation of approximately 2,600 employees over the next 18-24 months,” the release read. “The company is developing further plans to reduce its operating spending by an additional $100 million, which would bring the total annual expected savings to potentially $400 million.”
“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.”
Corn sales, which drive Monsanto’s business, decline 5.1% to $598 million. In the fourth quarter, Monsanto reported a loss of $495 million. Last year, it lost $156 during the same quarter.
Earlier this year the company failed to acquire Swiss seed and agribusiness company Syngenta.
In September, Chesapeake Energy (CHK) announced it has plans to cut 740 jobs.