Tyson Foods Announces Cuts To Corporate And Leadership Roles
In October of last year, the workforce for Tyson Foods, one of the biggest meat-based companies in the world, stood at 142,000 strong; 124,000 of whom were employed in the U.S. But that workforce has been eroding since then due to layoffs at both the employee and executive levels. In March 2023, for instance, CNBC reported that Tyson would be cutting almost 1,700 jobs as a result of upcoming poultry plant closures in Arkansas and Virginia that are scheduled to occur in May.
This week, Tyson announced it would also be slashing jobs in its corporate ranks. According to Reuters, these layoffs will include an estimated 600 people from its corporate team, a significant number in that it represents 10% of all corporate jobs at the company. Notably, Tyson also plans to remove 15% of its executives in senior leadership positions (such as vice presidents). The exact number of dismissals is not yet known, however, as Tyson shared the news via memo, and hasn't yet met with the corporate executives who will lose their jobs. Those meetings will take place during the upcoming week.
The reason given for Tyson Foods' latest round of layoffs is an increased need for efficiency, Reuters notes. But there may be other reasons for such shakeups, including two high-profile leadership missteps, and a sagging market that has led to flagging sales and underperforming stock.
Why Tyson Foods has been forced to cut staff
Tyson has had a number of woes, including two incidents involving corporate leadership. In January, Chief Financial Officer John R. Tyson, whose great-grandfather founded the company, made headlines in a bizarre incident that saw him drunkenly pass out in the room of a college student, leading to his arrest, the New York Post reported. That same month, Tyson sacked its poultry president, David Bray, after he misestimated the market for chicken, Reuters confirmed.
But Bray wasn't the only executive firing in the lead-up to the announcement of widespread corporate layoffs. Tyson axed Chris Langholz, its international business president, last August. Reportedly, others in leadership positions have left over the company's decision to center all corporate jobs in Springdale, Arkansas.
Tyson Food's problems seemingly go much deeper than leadership, however. Last November, as the company's stock numbers dropped, the Bank of America graded it an underperformer amid concerns over market competition and rising costs, observed Seeking Alpha. A few months later, The Motley Fool noted that Tyson's stock had plummeted by 40% in the course of a single year. What's behind these falling stock numbers? CEO Donnie King, in his first quarter 2023 earnings call, ticked off several issues that have led to lackluster results for beef, chicken, and pork sales. These included rising cattle prices, which flattened out the margins for their beef business. Demand, meanwhile, has been down for both pork and chicken.