Monsanto, one of the world's largest seed and agrichemical companies, said on Wednesday that it was slashing 2,600 jobs and restructuring operations to cut costs in a slumping commodity market that it expects to squeeze results well into 2016.
Monsanto, which also reported a much wider quarterly loss, said that along with the layoffs, its global restructuring would include "streamlining and reprioritizing" some commercial and research and development work, including an exit from the sugar cane business. Its shares fell 4 percent in premarket trading.
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The company said it expected the initial phase to lead to annual savings of $275 to $300 million by the end of fiscal 2017, at a total cost of $850 million to $900 million. It is developing further plans to reduce its operating spending by an additional $100 million, bringing the total annual expected savings to as much as $400 million.
Monsanto said it was pegging its earnings-per-share outlook for its new fiscal year, which began on Sept. 1, at $5.10 to $5.60. That is well below many analysts' expectations for more than $6.00.
To try to shore up investor confidence, the company announced a new $3 billion accelerated share repurchase program.
Monsanto said its loss widened to $1.06 a share for the fourth quarter ended on Aug. 31 from a loss of 31 cents a year earlier.
Sales of corn seeds and traits, Monsanto's key products, fell to $598 million from $630 million. And sales at the company's agricultural productivity unit, which includes Roundup herbicide, dropped to $1.1 billion from $1.25 billion in the quarter.
Shares of Monsanto were down 4 percent at $84.00. The stock had fallen roughly 30 percent from a high set last February, and its growth strategy has under intense investor scrutiny after its attempted takeover of Swiss rival Syngenta failed.
(Reporting by Carey Gillam in Kansas City, Mo.; Editing by Lisa Von Ahn)