Tyson Foods to eliminate 10% of corporate jobs, 15% of senior executives

CHICAGO, April 26 (Reuters) – Tyson Foods Inc ( TSN.N ) will eliminate about 10% of corporate jobs and 15% of senior management roles, Chief Executive Donnie King told employees on Wednesday.

The layoffs are the latest cost-cutting move for the biggest U.S. meat company in terms of sales, as it grapples with falling profits and struggles to improve performance at its iconic chicken business.

Discussions with most affected employees are scheduled to take place this week, King said in a memo to employees seen by Reuters. Shares closed 1.1% lower at $60.35 on Wednesday.

“We will drive efficiencies by focusing on fewer initiatives with greater intensity and removing duplication of effort,” King said.

Tyson had about 6,000 U.S. employees working in corporate offices as of Oct. 1 and 118,000 workers in non-corporate locations such as meat plants and warehouses, according to regulatory filings.

The eliminated senior management roles are mostly vice presidents and senior vice presidents, a company spokesperson said.

Some company employees have already quit after Tyson said in October it was moving all corporate jobs to its headquarters in Springdale, Arkansas. The 10% reduction in corporate roles is not due to employees leaving the company rather than moving to Arkansas, a spokesperson said.

A recent overhaul of Tyson’s management made some investors and analysts nervous.

The company fired Chris Langholz as president of its international operations in August. In September, Tyson said Noelle O’Mara, who headed the prepared foods division, had left the company. John R. Tyson, great-grandson of the company’s founder, took over as chief financial officer.

“The frequent changes in the management team in recent years suggest that there are inefficiencies within the corporate offices,” said Arun Sundaram, senior equity analyst at CFRA Research.

In January, Tyson replaced the president of its poultry business after the company incorrectly forecast demand for chicken.

The company has struggled for years to improve performance in its chicken business and said in March it would close two U.S. processing plants with nearly 1,700 employees.

Meatpackers generally raised wages for plant workers during the pandemic. Now they face shrinking operating margins and must increasingly compete to buy livestock to run plants at full slaughter capacity, analysts said.

“Margins are falling apart like this and it’s like we’re really bleeding now,” said Bob Brown, an independent livestock market expert.

Tyson’s adjusted earnings of 85 cents per share in the quarter ended Dec. 31 were down 70% from a year earlier. The company is set to report its next quarterly results on May 8.

Reporting by Tom Polansek

Our standards: Thomson Reuters Trust Principles.