WASHINGTON – Monsanto said Wednesday it will eliminate another 1,000 jobs as it expands a cost-cutting plan designed to deal with falling sales of biotech-corn seeds and other financial headwinds.
The additional layoffs will bring the agriculture giant’s total planned cuts to 3,600 jobs over the next two years, or about 16 per cent of its global workforce. In October the company first announced the restructuring plan, intended to streamline its sales, R&D and other operations.
The St. Louis-based company says the additional cuts will help generate between $1.1 billion and $1.2 billion in total savings, up from previous estimates of $850 million to $900 million.
Its shares slipped in morning trading Wednesday.
Monsanto has struggled in recent quarters to deal with slumping corn prices in the U.S., which have reduced demand for its bestselling product: genetically-enhanced corn seeds. Farmers are shifting more acres to other crops after surpluses of corn and other crops, including wheat, have squashed commodity prices.
The job cuts came as Monsanto reported a $253-million loss in the first fiscal quarter, citing foreign currency pressures and falling seed sales.
Despite a 17 per cent drop in revenue, the company’s adjusted results beat Wall Street expectations.
On a per-share basis, the company reported a loss of 56 cents. When adjusted for one-time gains and costs, the company turned a profit of 11 cents per share.
That was better than forecasts for a loss of 24 cents per share, according to the average estimate of nine analysts surveyed by Zacks Investment Research.
The agriculture products company posted lower revenue of $2.22 billion in the period, falling short of Street forecasts. Three analysts surveyed by Zacks expected $2.55 billion.
In the most recent quarter corn seed sales fell nearly 20 per cent to $745 million. Those results were partially offset by higher soybean sales, which grew 10 per cent to $438 million.
Monsanto’s biotech seeds have genetically engineered traits that help farmers increase their crop yield, despite their higher prices. The company, which also sells herbicide, has dominated the bioengineered-seed business for more than a decade and recently began developing products specifically for emerging markets like Argentina, Brazil and parts of Asia.
The company cautioned that its fiscal 2016 results would likely be in the lower range of its full-year guidance, $5.10 to $5.60, due to various headwinds, including the devaluation of Argentina’s peso. For the year, Monsanto expects negative currency trends will lower its earnings by 60 to 70 cents per share, more than its previous estimate of 35 to 40 cents per share.
Monsanto shares fell 59 cents to $96.15 in morning trading Wednesday. Its shares have fallen about 19 per cent over the past year.