Tyson Foods, Inc., Springdale, Ark, has announced on Sept. 28 plans to eliminate 450 jobs across several areas and levels of the company, citing potential redundancies from Hillshire Brands, AdvancePierre Foods and Tyson Foods employees. The layoffs were not unexpected as Tyson made similar cuts after its purchase of Hillshire Brands. News reports in late September also mentioned the company boosting its earnings guidance on strong beef segment performance.
Most of the jobs will be in the corporate offices in Springdale, Chicago and Cincinnati.
Considered the country's largest meat company, Tyson said it's implementing previously announced "financial fitness" plans, according to president/CEO Tom Hayes, and expects net savings of $200 million, $400 million and $600 million over fiscal years 2018, 2019 and 2020, respectively, according to a statement. The savings will primarily affect the prepared foods and chicken segments.
"We’re grateful to everyone who has contributed to the company’s success, and we’re thankful for their time with Tyson Foods," said Hayes. "These are hard decisions, but I believe our customers and consumers will benefit from our more agile, responsive organization as we grow our business through differentiated capabilities, deliver ongoing financial fitness through continuous improvement and sustain our company and our world for future generations."
Tyson is scheduled to report fourth quarter earnings on Nov. 13. It expects to report restructuring costs of $140 million to $150 million, according to a company press release. Of that, about $45 million to $50 million will be from employee termination costs.
“We are creating momentum behind our continuous improvement agenda as we know we can be even more efficient operators,” Hayes added. “We are a good partner for growth for our customers and are constantly challenging ourselves to identify opportunities to create value for our consumers, customers and share owners.”
Hayes has also detailed the company’s three-pronged approach moving forward, which includes growing the business; delivering results and sustaining the Tyson enterprise. The main factor in the plan is the company’s financial stability, he said, noting that Tyson must “continually have a focus on being financially fit.” This includes reducing its cost structure.
Tyson is benefiting from the $4.2 billion acquisition of AdvancePierre Foods Holdings Inc. in June by realizing synergies of more than $200 million.