ADM Plans to Cut Jobs as Profits Head for Third Year of Declines

Archer Daniels Midland (ADM), a global leader in agricultural processing and commodities trading, is planning to cut jobs as its profits continue to decline for the third consecutive year. The company, which specializes in transforming crops into products for food, animal feed, industrial, and energy uses, is facing significant market headwinds and operational challenges. In this article, we will explore the reasons behind ADM's decision to cut jobs, the potential impact on the broader agricultural sector, and the company's outlook for the future.



ADM's financial performance has been on a downward trend since 2020, with net income and EPS both declining significantly. In 2024, the company reported full-year net earnings of $1.8 billion and adjusted net earnings of $2.3 billion, with earnings per share (EPS) of $3.65 and adjusted EPS of $4.74. These figures represent a significant decline from the previous year, highlighting the company's struggles in the face of market headwinds and operational hurdles.

The most concerning aspect of ADM's financial performance is the sharp deterioration in the Ag Services & Oilseeds segment, which saw operating profit plummet by 40% to $2.4 billion in 2024. This decline was primarily due to compressed crush margins and challenging South American conditions. The announced cost-saving initiative targeting $500-750 million over the next 3-5 years, including a workforce reduction of 600-700 roles globally in 2025, represents a strategic pivot toward operational efficiency. However, this move also signals management's expectation of prolonged market challenges.

ADM's conservative 2025 guidance of $4.00-4.75 adjusted EPS reflects ongoing uncertainties in biofuel policies and trade dynamics. The company's decision to cut jobs is a response to these challenges, as it seeks to protect margins and improve operational efficiency. However, the reduction in workforce may also impact the segment's overall operations and profitability, as the Ag Services and Oilseeds segment is a critical part of ADM's business.



The potential implications of ADM's job cuts on the broader agricultural sector are significant. The reduction in processing capacity may lead to increased prices for agricultural commodities and their derivatives, benefiting ADM's competitors who maintain their production levels. Competitors may also take advantage of the more competitive job market to attract and retain top talent, strengthening their workforce. Additionally, ADM's market share may decrease, leading to a more competitive landscape with competitors vying for market dominance.

In conclusion, ADM's decision to cut jobs as profits head for a third year of declines is a response to the company's struggles in the face of market headwinds and operational challenges. The potential implications of this move on the broader agricultural sector are significant, with competitors likely to respond in various ways. As ADM navigates these challenges, investors should closely monitor the company's progress and the broader market dynamics that may impact its financial performance.