Monsanto have suffered an embarrassing blow to their profits, forcing the agricultural giant to axe 3,600 jobs in the months ahead.
Earnings have continued falling in the first quarter of the 2016 fiscal year, meaning that the corporation will be forced to scrap 16% of its global workforce in order to save $300 million by the end of 2017.
“Monsanto Co. plans to slash another 1,000 jobs worldwide, bringing total planned cuts to 3,600 or about 16 percent of its global workforce, according to a filing Wednesday with the U.S. Securities and Exchange Commission. The job cuts are part of a broader, previously announced plan to target $500 million in annual savings by the end of fiscal year 2018.”
According to a report by Allen on Jan. 13, “Monsanto reported a first quarter operating loss of $253m (€233m), a significant deterioration compared to the $243m operating profit generated for the same period last year.”
Monsanto has faced repeated protests against its business practices and the harm to human health and the environment posed by its products. The annual March Against Monsantoattracted tens of thousands of participants globally in May. Russia to Europe have taken action to ban genetically modified crops, especially Monsanto corn. Increasing awareness of thecancer-causing potential of glyphosate, the key ingredient in Monsanto’s Roundup weedkiller, has also cut into profits.
Prior to the latest announcement of their falling earnings, Monsanto stock had reached a one-month high of $99.28, but fell to a low of $89.91 on Jan. 20 before recovering slightly to close at $91.87 at the close of trading last week.
Some analysts believe the stock price could drop even further. A Jan. 7 report from Jennifer Lynn, writing for financial news site Benzinga, quoted a note from investment research firm Bernstein, whose analysis suggested the stock should be trading at closer to $84.00 given the company’s poor performance:
“Monsanto Company earnings update reinforces our bearish view of the stock, highlighting continued (and worsening) weakness in glyphosate and weak GM seed pricing.”