Archer Daniels Midland (ADM) announced a 3 percent reduction in the company’s total workforce Wednesday.
According to a news release, 1,000 jobs, primarily salaried positions, will be eliminated.
David Weintraub, ADM spokesman, said the reduction will be implemented in two phases. First, salaried employees 57 years of age and older with over seven years of experience at the company will be offered early retirement incentives. This will hopefully help reduce 15 percent of corporate staff, which Weintraub referred to as “back office” staff like human resources and communications employees, and 5 percent of business unit staff, which would consist of plant and business management.
From there the company will begin the second phase, and will evaluate what further personnel moves are needed to meet stated goals.
“Until we know how many of the eligible people in the United States elect to retire, we won’t know about the second phase,” Weintraub said, adding that determining the impact on a specific site is impossible until the early retirement window closes. “We set this up so we could reduce the number of people who are in that second phase.”
Weintraub said the move is designed to “streamline” ADM’s leadership, and shouldn’t affect production or drastically affect hourly employees.
The move is an effort to enhance the company’s cost structure. It is expected that these actions, “in concert with other targeted cost reductions,” will reduce ADM’s expenses by more than $100 million, according to the statement.
“To ensure that we can continue to compete effectively in our global markets, we are taking actions to streamline our organization and achieve significant, sustained cost reductions,” said Patricia Woertz, ADM chairman and chief executive officer, in a statement. “These actions will help us enhance our productivity and earnings power.”
Benefits of this reduction are expected to be fully realized by the end of 2013. The consistently profitable agribusiness conglomerate is based in Decatur, Ill., and has locations across the world. The Clinton facility boasts a massive cogeneration plant, believed to be one of the largest of its kind.
The staff reductions are not an indictment of current ADM employees, according to the statement.
“These decisions do not reflect on the talent or dedication of our ADM team,” Woertz said. “They reflect our confidence that we can streamline our organization while maintaining our ability to grow profitability, as well as our commitment to customers and to operational excellence.”