Tyson Foods has today announced it plans to cut 450 jobs in the US as it targets savings over the next three years.
Most of the eliminated positions will come from the corporate offices in Springdale, Chicago and Cincinnati.
Tyson also revealed it expects adjusted earnings for the fiscal 2017 year, which ends this Saturday, to come in between $5.20-$5.30 per share, up from its previous prediction of $4.95-$5.05 per share.
This is primarily due to ‘much better’ earnings in its beef segment.
The company said that synergies from purchasing AdvancePierre Foods – the snack company which it acquired for $4.2 billion earlier in the year – as well as the eliminations of non-value-added costs, were behind its savings projections.
In 2018, 2019 and 2020, Tyson expects cumulative net savings of $200 million, $400 million and $600 million respectively.
The savings will mainly impact the company’s prepared foods and chicken segments, focusing on three areas: supply chain, procurement and overhead.
Tom Hayes, Tyson’s president and CEO, said the company is implementing its previously-announced ‘financial fitness’ plan.
“We are creating momentum behind our continuous improvement agenda as we know we can be even more efficient operators,” he said.
“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 shareowners.”
Speaking of the lay-offs, he added: “We’re grateful to everyone who has contributed to the company’s success, and we’re thankful for their time with Tyson Foods.
“These are hard decisions, but I believe our customers and consumers will benefit from our more agile, responsive organisation 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.”
In its fiscal fourth quarter earnings report, Tyson Foods plans to report restructuring and other charges of approximately $140-$150 million, composed of approximately $70 million impairment for costs related to in-process software implementations, $45-$50 million in employee termination costs and $25-$30 million in contract termination costs.
Earlier this month, Tyson revealed it plans to build a $320 million poultry complex in eastern Kansas, which will create 1,600 jobs.
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