Monsanto has revealed lower revenues and its plans to cut costs and eliminate a portion of its workforce on Wednesday. The agricultural products giant has been suffering from a loss since last year, and it is now ready to face the repercussions.
According to Bloomberg, Monsanto Co. has revealed its plan to cut about 2,600 people from its workforce within the next two years amid a decline of world commodities pricing.
In it announcement, the agricultural giant admitted that the expected layoffs account for 12 percent of its total workforce, which is composed of about 22,500 employees.
The St. Louis-based company then said that it is hoping for the job cuts to to help generate an amount between $275 million and $300 million by the end of the 2017 fiscal year.
Meanwhile, the cost of reorganization is approximately between $850 million and $900 million.
In the recent years, Monsanto's genetically-enhanced corn seeds have dwindled on their market sales. The harvest of the corn even paved the way to a significant surplus, making the company all the more struggle, as per New York Times.
The announcement came after the company revealed a net loss of $495 million for its fiscal fourth quarter. Also, the company is said to be exiting the sugarcane business while it is working on a restructuring plan that could all the more cut costs.
Monsanto is also plotting a developmental plan that could help it reduce its spending by an additional $100 million, Nasdaq has learned.
Speaking of Monsanto's renewed and reinvigorated plan, New York-based analyst Chris Shaw said, "It seems surprising that they are still confident of reaching the 2019 goal given the environment they are facing for 2016."
Meanwhile, just this Monday, Monsanto's biggest rival DuPont announced that it is cutting its 2015 earnings forecast amid CEO Ellen Kullman's retirement news.
Monsanto shares dropped $1.96 in Wednesday morning's trading.
