Monsanto (NYSE:MON) will cut 2,600 jobs over the next two years, the company said Monday following a dismal earnings report.
The company saw net sales for its fiscal year drop $800 million compared to last year to $15 billion in net income. Net income dropped 15.5 percent to $2.3 billion. Fourth-quarter net sales sank $275 million from the same period last year to $2.4 billion. It lost $495 million in the quarter, compared to a $156 million loss last year.
The staff cuts are projected to save the company $275 million to $300 million by 2017. The company said it would also reduce operating expenses by $100 million.
It also plans to streamline its commercial and R&D operations and drop its sugar can business in Brazil. It also plans to buyback shares.
It said it expects low prices for agricultural products to hurt its results into 2016 and its outlook was below most analysts projections. Monsanto forecast $5.10 to $5.60 earnings per share in the new fiscal year, which began on Sept. 1. Analysts predicted more than $6.
Monsanto President and CEO Brett Begemann said in a conference call Wednesday that the cuts would boost the company’s agility and make it more focused and effective.
The company plans to expand its sales of agricultural digital data products aimed at helping farmers increase crop yields. Farmers are notoriously slow adopters of new technologies, however, and the company, among others have had difficulty in establishing markets for their software and data products.
Monsanto is the world’s leading producer of genetically modified, or GM, seed and the herbicide Roundup. LIke most agbio firms, Monsanto has a major presence in NC with research laboratories at the Kannapolis, NC Research Campus.
Details on where the job cuts will come were sketchy. The company says the cuts will affect 11.6 percent of its workforce.
Monsanto shares traded at $88.06, up slightly from Tuesday’s close, but well below its $126 52-week high.
