Troubled Tyson slashes jobs and costs
jobs and execute a tough $200m savings plan, as it struggles to
offset sliding profits caused by a worldwide slump in beef and
chicken demand.
The meat processor, which employs 114,000 people worldwide, plans to eliminate 420 jobs while leaving vacant a further 430 jobs which are currently unfilled.
The new savings program expands on chief executive Richard Bond's original $110m (€87.7m) plan announced earlier this year, and will concentrate on slashing staff levels, consulting fees, travel and sales-related expenses and supplies.
"This has been a difficult process, especially since it involves the displacement of some of our team members," said Bond.
"However, we would not be doing this unless we believed it was absolutely necessary."
Jobs being eliminated include 140 positions in northwest Arkansas and 90 in Dakota Dunes and Dakota City, Nebraska. The remaining positions are at various locations throughout the company.
Tyson's senior management team has also decided to delay annual bonuses from July 2006 to January 2007, and has temporarily suspended the Stock Purchase Plan for salaried management for the remainder of 2006.
But Tyson acknowledged it can't just save its way back to profitability, and will also work to improve cost management, introduce more value-added products, bolster operational efficiencies and expand its international business to encourage "top line growth".
With sales of over $26bn Tyson is the world's largest protein processor with operations in beef, chicken and pork, as well as branded packaged foods.
But while US beef exports to Japan and South Korea remain restricted due to fears of BSE contamination, and domestic consumers are shying away from chicken following bird flu media hype, the outlook remains bleak for the food manufacturer.
Earlier this year Tyson reduced its yearly profit forecast, indicating weaker than expected operating performance and sluggish earnings. On 1 May the firm revealed a $127m loss for the second quarter of 2006.
Following the announcement, many analysts are now forecasting major year-end losses for the firm struggling to maintain margins as domestic oversupply of meat, export restrictions and lowered consumer confidence create difficult market conditions.
