In a recent filing with the Securities Exchange Commission, Monsanto Company has disclosed that it is looking to cut as much as 2,6000 jobs from its global workforce in the next 18 to 24 months. This is in line with its commitment to realigning the company’s resources in order to be able to make some cost improvements, increase productivity, improve competitiveness, thereby setting the company toward a path of long-term growth.
Around 12% of Monsanto’s global workforce will be part of the separation. Moreover, the company has explained that the number of people to be laid off per country would vary. For its restructuring plan, the company is looking at a restructuring charge between $850 million and $900 million, around $330 million to $350 million of which will be for severance packages and benefits. Of this, Monsanto says around $493 million of the charge occurred in the fourth quarter. Meanwhile, most of remainder will occur in fiscal year 2016.
Net sales for Monsanto were down in fiscal year 2015 from $15.86 million to just around $15 million, reflecting a 5% decline. The biggest sales came from corn seed and traits. However, the said business suffered a significant sales decline this year, going from $6.4 million in 2014 to just a little under $6 million this year. Meanwhile, the company’s soybean seed and traits business is the second largest sales contributor. Sales for this business also dipped slightly, going from $2.1 million in 2014 to $2.2 million in 2015.
At the same time, gross profit is also down 5% from $8.57 million to $8.18 million. Meanwhile, net income suffered a 16% decline, going from $2.7 million in the previous fiscal year to just $2.3 million in this fiscal year.
Nonetheless, Monsanto is staying optimistic and has even identified key products that can help deliver a gross profit growth of around $3.5 billion between fiscal years 2015 and 2019. These are corn, soybeans as well as complementary crops such as cotton and vegetables.
The company looks to complete its restructuring plan during the fiscal year of 2018.