Monsanto Company (NYSE:MON) announced that it was trimming 2,600 employees and reorganising operations to save expenses in a declining commodity market. The company also posted a wider loss and issued a disappointing outlook below consensus forecast.
The job-cuts would affect 11.6 percent of the regular workforce of the company. The worldwide restructuring will also include a departure from the sugar cane segment. In order to boost investor confidence, the company revealed an accelerated share buyback plan of $3 billion that would be completed during the next six months.
The leading seed and agrichemical company said it anticipates to incur restructuring expenses in the range of $850 million to $900 million. Once completed, the measures would allow Monsanto to save up to $400 million annually.
The restructuring efforts comes amid an agricultural recession and a currency collapse in the critical market of Brazil.
Swiss competitor Syngenta AG is also making efforts to boost its bottom line by getting rid of a vegetable seed segment and undertaking a share repurchase of $2 billion. Agricultural seed seller, DuPont has also cut its earnings guidance.
Monsanto (MON) is anticipating earnings in the range of $5.10 per share to $5.60 per share for the new fiscal year starting on Sept. 1 that is far behind average consensus forecast of over $6.00 a share.
The company loss increased to $1.06 per share for the fourth quarter, as compared to 31 cents per share last year.
Monsanto plans to grow sales of agricultural digital data products developed to assist farmers to increase crop yield. Officials said the company will soon begin field trials in Brazil.
Farmers have shown their willingness to use new products manufactured by Monsanto and other rivals, but they are hesitant to pay for them.
