January 7, 2016
By Alex Keown, BioSpace.com Breaking News Staff
ST. LOUIS, Mo. – Monsanto will eliminate an additional 1,000 jobs as part of a cost-cutting plan as the company adjusts to falling sales of biotech-corn seeds and other concerns, the Associated Press reported this morning.
The latest announced cuts bring Monsanto’s total job eliminations to 3,600 over the next two years. In October, the company said it would eliminate 2,600 employees across the board. The restructuring plan was expected to bring annual savings of $275 to $300 million by the end of 2017. The new layoffs are expected to bring savings up to about $500 million and will total about 16 percent of the company’s workforce. It was not specified which divisions would feel the biggest bite of the layoffs, but a Monsanto spokesperson told the St. Louis Business Journal that the layoffs would “take place across a variety of functions/units globally.”
Additionally in October, Monsanto announced it was shuttering three research and development areas this year, one in Middleton, Wis. and Mystic, Conn., both of which focus on seed trait development research. Additionally, the company will close a site in the Research Triangle Park area of North Carolina, which focuses on research on plant screening and phenotyping, Reuters reported. About 90 employees will be terminated as a result of the closings, while the remaining 65 will be shifted to another facility.
The restructuring plan, which includes an exit of the sugarcane business, is expected to have a cost of about $1.2 billion. Monsanto has struggled recently as its bio-engineered corn seed sales have slumped. In its most recent quarterly report, Monsanto reported a net loss of $253 million. The decline in seed sales is primarily due to a “global glut of corn and soybeans,” Reuters noted this morning.
Hugh Grant, Monsanto’s chief executive officer, told analysts during a conference call that the company has lowered its earnings expectations for the year, Reuters reported. At the same time, Grant also said he and his colleagues believe there is still potential for a deal with the Swiss-based agrochemical company Syngenta AG, which rejected a $45 billion deal last year, Reuters said.
Monsanto did report some good news in December regarding its collaboration with Massachusetts-based Nimbus Therapeutics, LLC. Nimbus reported the companies achieved a milestone in the development of an agricultural fungicide. The collaboration is already highlighting early season seed treatment benefits in row crops as well as strong foliar disease control in vegetable trials, Nimbus said in a statement.
While Monsanto is struggling with lower demand for its seed, it will soon have to deal with a looming merger of DuPont and Dow Chemical , called DowDupont. That merger is expected to unite both company’s crop and seed businesses, propelling it to the forefront of the seed and pesticide industry, passing industry giant Monsanto Co.
