Hormel Foods Announces Corporate Restructuring, 250 Office Layoffs

Hormel Foods Corp. is undertaking a corporate restructuring that should result in the reduction of approximately 250 corporate and sales positions, hopefully through a voluntary early retirement program.

The program is “designed to thoughtfully align resources with the organization's strategic priorities, support future growth and strengthen the overall business,” today’s statement said.

Although still solid, Hormel’s finances have hit some headwinds this year, with company officials twice revising downward their full-year financial outlook. The company also is in the midst of a transformation from leadership on down.

Longtime chairman and CEO James Snee presumably retired Oct. 31, (there was no formal announcement) with former chairman and CEO Jeff Ettinger named CEO on an interim basis, while John Ghingo was elevated to president. Last week, CFO Jacinth Smiley suddenly left the company and the group vice president of sales announced his retirement. A day earlier, Hormel gave 51% control of its Justin’s nut butter business to an investment firm.

While most maintain a “buy” rating of its stock, some financial analysts worry about the management instability.

In its third-quarter financial report, which dates back to Aug. 28, sales and even volumes increased in all three of its reporting segments, although profits dipped. Sales hit $3.03 billion for the quarter, up 4.7%, although officials did lower their still-profitable full-year outlook by 7%.

“To ensure the company remains efficient and well-positioned for long-term success, Hormel Foods has implemented a voluntary early retirement program for a portion of its non-plant workforce, is closing many open roles and will reduce certain positions across its office-based workforce,” today’s statement said.

“The restructuring reflects the company's ongoing focus on balancing cost discipline with reinvestment in areas critical to its future.”

President Ghingo added, "Hormel Foods remains focused on growth — and growth requires continued investment. We're directing resources toward technology, innovation, food safety and quality, and the capabilities — including people capabilities — that will shape our future. We're confident that our ongoing investments will strengthen our brands, improve efficiency and ensure Hormel Foods stays competitive and responsive to the needs of our consumers and customers."

The company expects to incur restructuring charges in the range of $20-25 million. Substantially, all the charges are expected to be related to one-time pension benefits, cash severance payments, stock compensation expenses and employee benefit costs. Most of the charges are expected to be incurred in the fourth quarter of fiscal year 2025 and the first quarter of fiscal year 2026.