Monsanto has announced the extension of its layoff plan to include 1,000 more jobs as part of its cost reduction plan. The addition of the new layoffs brings the total expected job cuts to 3,600 jobs over the next two years. The job cuts are expected to impact around 16% of the agriculture giant’s global workforce.
Monsanto first announced the restructuring plan in October. The plan is designed to deal with the St. Louis-based company’s declining biotech corn seed sales and other financial hurdles by streamlining its sales, R&D and other operations. The company estimates that the restructuring will now cost between $ 1.1 billion and $ 1.2 billion to implement, an increase from its previous estimate of $ 850 million to $ 900 million. The cost reduction measures are expected to generate annual savings of $ 500 million by the end of fiscal 2018.
Corn prices in the United States have fallen, reducing demand for Monsanto’s best-selling product: genetically improved corn seeds. In the last quarter, sales of corn seeds fell nearly 20% to $ 745 million. The company has dominated the bioengineered seed industry for over a decade. According to an Edward Jones analyst, Montsanto controls about 18 percent of the world’s $ 44 billion seed market.
The latest plan comes after Monsanto reported a net loss of $ 253 million, or 56 cents per share, for its first fiscal quarter. After adjusting for one-time items, the loss was 11 cents per share. This was lower than the expected loss of 24 cents per share on average by analysts polled by Zacks Investment Research. The agricultural products company saw a 23 percent drop in revenue during the period, even as soybean sales rose 10 percent. The company warned that its fiscal 2016 results would likely fall within the lower range of its annual forecast of $ 5.10 to $ 5.60 in earnings per share.
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