ADM is phasing out its domestic trading activities in China under its Toepfer Shanghai subsidiary and initiating layoffs in Shanghai, ChemAnalyst reported on 15 April.
ADM said the transition would begin immediately and was expected to conclude by the end of the third quarter in September, according to a 15 April World Grain report.
The move comes amid broader cost-cutting measures and ADM posting its lowest fourth quarter adjusted profit in six years in February. ADM also announced that month that it would cut up to 700 jobs – around 1.7% of its global workforce – and reduce costs by US$500M-US$750M over the next three to five years, including US$200-$300M this year.
In addition, the company also confirmed in March that it was cutting an undisclosed number of jobs in its Ag Services and Oilseeds unit as part of “the targeted workforce reduction and cost saving actions we announced earlier this year,” Jackie Anderson, senior director of external communications at ADM, told World Grain.
The unit is ADM’s largest division and comprises the company’s global crop trading, oilseed processing, and transportation and storage operations.
ChemAnalyst wrote that ADM was grappling with a decline in crop prices, weakened consumer demand caused by inflation, shrinking profit margins in its processing sectors and increased trade tensions between the USA and China, with the USA as a leading exporter of agricultural products as China a top buyer.
The company's stock price had plummeted since it launched a voluntary investigation in January 2024 into accounting practices in its nutrition segment, an earlier 26 March World Grain report said. The probe was largely complete but had triggered two federal investigations, with ADM forced to revise six years of financial statements early last year and restate some earnings later in 2024, the report said.
According to media reports, the job cuts in China were expected to affect between 40-50 people, leaving only around 10 staff members at its Shanghai office, ChemAnalyst wrote.
ADM is part of the world's 'ABCD' top four grain traders including Bunge, Cargill and Louis Dreyfus and employs 38,000 workers globally, according its website.
