Monsanto to cut jobs as fourth quarter falls short

Company exiting sugarcane business, cutting approximately 2,600 jobs to improve viability.

Krissa Welshans 1, Feedstuffs Editor

October 8, 2015

2 Min Read
Monsanto to cut jobs as fourth quarter falls short

Monsanto recently released 2015 fourth quarter and fiscal full year results, revealing results that fell short of analyst expectations and reflected the economic challenges in the agriculture sector. Monsanto reported a net loss of $495 million in the fourth quarter of fiscal year 2015, compared with a reported net loss of $156 million in the same period last year. Net income attributable to Monsanto for fiscal year 2015 was approximately $2.3 billion compared to net income attributable to Monsanto of $2.7 billion in fiscal year 2014.

They company reported net sales of $2.4 billion for the fourth quarter of fiscal year 2015. Net sales for the full fiscal year were $15 billion. According to the company, full-year net sales results were driven by the performance of the company’s Seeds and Genomics segment and licensing agreements, which were more than offset by foreign currency headwinds, declining corn acres and declines in glyphosate pricing.

The company also announced plans for global restructuring actions to improve the company’s long-term viability during the current economic challenges. According to Monsanto, the changes are designed to transform and innovate the way the company operates resulting in a more agile and focused organization prepared to continue to lead the agriculture industry.

The company said part of the plan includes cutting approximately 2,600 jobs and exiting the sugarcane business, the company said.

The initial phase was 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. Additionally, the company said it 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.

Monsanto also reiterated its commitment to its capital allocation strategy by announcing plans to enter into a new $3 billion accelerated share repurchase program under its current share repurchase authorization. The program is set to begin in the near-term and be completed sometime in the next six months, the company said.

"The fundamentals of our business are strong and Monsanto remains the best positioned company in the industry,” Hugh Grant, chairman and chief executive officer for Monsanto said. “As we look to 2016, focus and discipline become increasingly important.”

Grant said the company will continue to focus on executing key milestones within the core seeds and traits business. Additionally, the company plans to remain disciplined in its agricultural productivity strategy, drive further optimization in spend through strategic restructuring actions and accelerate its progress toward its targeted capital structure.

“A focus on these priorities will set the foundation for expected rapid growth, with our strong core business and several growth drivers continuing to underpin our confidence to meet our target of more than doubling fiscal year 2014 ongoing EPS by fiscal year 2019," Grant said.

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