Tyson Foods is set to eliminate 10% of corporate jobs including 15% of senior leaders

Tyson Foods Inc is one of the largest food companies in the world and has been providing chicken, beef, and pork products for over 85 years. Founded in 1935, the company has grown to be a significant player in the US and global food markets. However, Tyson's recent decision to eliminate 10% of corporate jobs and 15% of senior leadership roles has raised concerns among investors and analysts.

The layoffs are the latest cost-cutting measure for the company as it tries to improve its financial performance amid declining profits and struggles in its iconic chicken business. Tyson's CEO, Donnie King, told employees about the decision to lay off workers in a memo seen by Reuters. According to regulatory filings, Tyson had about 6,000 US employees working in corporate offices as of October 1, 2020, and 118,000 workers at non-corporate sites such as meat plants and warehouses.

The company's decision to reduce its workforce comes at a time when it is facing several challenges, including declining profits in its chicken business. Tyson has been struggling to improve the results of its chicken business for years, and the closure of two US processing plants with almost 1,700 employees in March 2023 is an indication of the company's struggle to turn things around. Tyson's adjusted earnings of 85 cents per share in the quarter ended December 31, 2020, were down 70% from a year earlier, which is a significant decline.

Tyson's recent executive leadership overhaul has also raised concerns among investors and analysts. The company fired Chris Langholz as president of its international business in August 2020 and announced that Noelle O'Mara, who led its prepared foods division, had left the company in September 2020. John R. Tyson, great-grandson of the company's founder, took over as finance chief. Arun Sundaram, senior equity analyst at CFRA Research, noted that "the frequent changes in the leadership team over the past few years suggest that there are inefficiencies within the corporate offices."

The layoffs are not unexpected, given Tyson's recent move to relocate all corporate jobs to its headquarters in Springdale, Arkansas. Some corporate employees had already quit after the announcement, and the company confirmed that the 10% reduction in corporate roles is not due to employees leaving the company but rather relocating to Arkansas.

According to King, the company will "drive efficiency by focusing on fewer initiatives with greater intensity and removing duplication of work." Discussions with most affected employees are slated to take place this week. However, the layoffs will result in some loss of talent and expertise, which may impact the company's future performance. The eliminated roles in senior leadership are mostly vice presidents and senior vice presidents, according to a company spokesperson.

Meatpackers generally increased pay for plant workers during the pandemic. Still, they now face declining operating margins and must increasingly compete to buy livestock to run plants at full slaughtering capacity, according to analysts. Bob Brown, an independent livestock market expert, said, "Margins fall apart like this and it's like, we're really bleeding now." The increased competition in the meatpacking industry has also put pressure on Tyson's profits, making the layoffs a necessary step towards improving the company's financial performance.

In conclusion, Tyson Foods' decision to lay off 10% of corporate jobs and 15% of senior leadership roles comes at a time when the company is facing several challenges. The layoffs are the latest cost-cutting measure for the company as it tries to improve its financial performance amid declining profits and struggles in its iconic chicken business. The decision is not unexpected, given Tyson's recent move to relocate all corporate jobs to its headquarters in Springdale, Arkansas. However, the layoffs will result in some loss of talent