DOW JONES NEWSWIRES
Archer Daniels Midland Co. (ADM) said it would streamline its
organizational structure and cut its worldwide work force by about
3%, aiming to help eliminate $100 million in annual costs.
The company has been battling increasing pressure from
raw-materials prices and a higher tax burden in the U.S.
On Wednesday, the grain processor said it would eliminate
approximately 1,000 positions, primarily salaried, and would offer
a voluntary early retirement incentive in the U.S. to help achieve
the reduction.
ADM said it expects that these actions, along with other
targeted cost reductions, would reduce its annual pretax expenses
by more than $100 million when fully implemented. It said it would
will offer severance and outplacement assistance to other affected
employees.
ADM expects to record a pretax charge of $50 million to $75
million in the current fiscal quarter related to these actions. It
predicted it would begin benefiting from the cost reductions in the
next fiscal quarter, which begins in April, with the full benefit
recognized by about March of next year.
Recently, the company's profitability in its corn- and
oilseed-processing segments has struggled with margin pressure
because of higher commodity costs. In the latest period, however,
profit jumped in its key agricultural services division, which
handles and transports grain from farm to market and accounts for
the largest portion of the company's earnings.
Shares were up 13 cents at $28.91 in recent trading.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com