ADM cuts jobs & shuts down trading operations due to profit declines
The company is shutting down its trading operations, laying off employees in its largest business segment, Ag Services and Oilseeds.
CHINA – The Archer-Daniels-Midland Company, an American multinational food processing, has phased out its domestic trading activities in China under its Toepfer Shanghai subsidiary as part of its broader global cost-reduction initiative.
As reported by Reuters, this move aims to enhance the company’s agility in a challenging market environment. The restructuring comes as ADM grapples with declining profits driven by several factors, including lower crop prices, inflation-induced reductions in consumer demand and weak processing margins.
The company’s operating profit in its Ag Services and Oilseeds division plummeted by 40% last year, reflecting the broader challenges faced by the sector.
While ADM has not publicly disclosed the exact number of layoffs, sources indicate that between 40 and 50 employees will be affected, leaving a mere 10 staff members in Shanghai’s financial hub.
“The entire Ag Services and Oilseeds team in China has essentially been let go,” a source familiar with the situation revealed to Reuters.
The decision to halt domestic trading operations at Toepfer Shanghai is expected to conclude by the end of September. ADM has clarified that its other operations in Shanghai will remain unaffected.
The rising trade tensions between the USA and China has also introduced further complexities for ADM, which relies heavily on the flow of agricultural goods between the two nations.
The USA is the largest farm goods exporter, while China is the top importer, making the dynamics of this relationship crucial for ADM’s operations.
After posting its lowest fourth-quarter adjusted profit in six years, the company announced in February that it planned to lay off 600 to 700 employees in 2025.
It also aimed to cut costs by US$500 million to US$700 million over the next three to five years, including US$200 million to US$300 million this year.
CEO Juan Luciano said it was difficult to predict how ADM’s global trading business would fare if President Donald Trump’s orders to raise tariffs on Canada, Mexico and China sparked broad retaliation from the top three buyers of U.S. farm goods.
He added, “Tariffs imposed by the U.S. government tend to have a slightly positive benefit to us. The issue is the retaliatory measures. ADM is on a short list of grain-trading companies that can benefit from such trade turmoil.”
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