- Tyson Foods said it will eliminate 450 jobs. Most of the layoffs will occur at the company's headquarters in Springdale, Arkansas, and at corporate offices in Chicago and Cincinnati, the company said in a statement.
- “These are hard decisions, but I believe our customers and consumers will benefit from our more agile, responsive organization as we grow our business through differentiated capabilities, deliver ongoing financial fitness through continuous improvement and sustain our company and our world for future generations,” said Tom Hayes, Tyson’s president and chief executive officer.
- The company also said that due to a "much better than expected" profit from its beef segment, it was increasing its fiscal 2017 forecast for adjusted per-share earnings to between $5.20 and $5.30, up from $4.95 to $5.05 a share. Guidance for fiscal 2018 was set for adjusted earnings of $5.70 a share to $5.85 a share, while estimates had been $5.35.
Tom Hayes, Tyson's CEO, said the restructuring is part of the company's "Financial Fitness" plans and an effort to show that it can operate more efficiently. No details were provided on exactly how or where changes would be made, but further information is likely to accompany the fourth quarter earnings report on Nov. 13.
Tyson did indicate that the synergies from integrating AdvancePierre Foods — a convenience and ready to eat sandwich and snacks company it bought earlier this year for $4.2 billion — plus shedding some other "non-value-added costs," were behind its strong savings projections during the next three fiscal years. The meat processor said it expects cumulative net savings of $200 million, $400 million and $600 million during fiscal years 2018, 2019 and 2020, respectively.
Impacts from a possible sale of some of Tyson's non-meat brands —Sara Lee frozen bakery, Kettle frozen foods and Van's breakfast items — also could play into the current economic scenario. The company announced back in April that it was looking to sell those assets in order to focus on protein products.
Hayes has only been at the helm of Tyson since Jan. 1, but he has made a clear commitment to growing and transforming the company, focusing especially on boosting its presence in protein. Global demand is growing, and the meat giant wants to fortify its position to capitalize on this trend and grow along with it.
Last year, Tyson took a 5% stake in Beyond Meat, the first time a major meat company invested in a plant protein-based company. The company also has a $150 million venture capital fund that invests in companies developing meat substitutes.
“I think the migration [toward meatless proteins] may continue in that direction,” Hayes told Fox Business Network in March. “People want protein, so whether it’s animal-based protein or plant-based protein, they have an appetite for it.”
It seems clear the company intends to focus on its core meat and poultry products. It is investing $84 million to expand and upgrade its Union City, Tennessee, poultry plant, doubling output capabilities at the facility. And Tyson is opening a 75,000-square-foot, state-of-the-art Incubation Technology Center in Springdale, which will replace two other nearby hatcheries.
Something unlikely to change is the continuing consumer demand for one of Tyson's major products. Per-capita chicken consumption in the U.S. is up — Americans eat nearly twice as much chicken (89 pounds per year) than they do beef and pork (54 and 50 pounds, respectively). As long as it stays that way, Tyson may have every reason for optimism. But even if it doesn't, with its other investments and acquisitions, Tyson is ready.