Tyson Foods Inc. (NYSE: TSN) of Springdale plans to eliminate 15% of the company's leadership positions and 10% of its corporate roles in a cost-cutting move, according to a memo CEO Donnie King sent to employees Wednesday.
In the memo, provided to Arkansas Business by its news partner KFSM, King said the meat giant is simplifying its structure, focusing on fewer initiatives with greater intensity, and removing duplication of work to "align our business and our priorities to enable long-term success."
"While this will require time to process," the memo said, "these decisions are necessary to continue executing our long-term strategy and over time will make Tyson Foods stronger."
The number of jobs being cut was not immediately clear. King said the majority of affected employees will be notified this week.
As of October 1, the company had 141,819 employees globally, with 123,420 employees based in the U.S. and 18,399 employees located outside of the U.S.
Tyson has about 24,000 workers in Arkansas.
The layoffs come after Tyson announced last month that it would close a 48-year-old poultry plant in Van Buren, a move that will affect 969 employees. It's also closing a plant in Glen Allen, Virginia, that employs 692 people.
According to King's memo, Tyson will move its customer office and sales activities under the businesses and growth teams, with the exception of customer service, sales training, and enablement, which will remain in the customer office.
Employees working on automation will be moved into Tyson's engineering team, "ensuring end-to-end alignment of our capital projects from scope to execution," the memo said.
The part of the company responsible for auditing projects and maintaining standards of quality will move to the business units, a move that will bring it "closer to execution and more aligned to the needs of operations." Workers in regulatory labeling will join food safety and quality assurance workers in a consolidated division.
King said those moves are being made to "break down barriers and bring ideas to execution faster."
"To best align with our customers’ and consumers’ needs, team members must be empowered to make decisions at the right level of the organization with speed, collaboration, and agility," he said.
Tyson has looked to reduce expenses and improve efficiency in other ways, as well. Last year, it launched a productivity plan that helped save the company $700 million in the fiscal year. The company expects to reach its goal of $1 billion in savings under the program in fiscal 2023, a year ahead of schedule.
Meanwhile, profits have fallen sharply on lower beef prices and an oversupply of chicken. Net income in the company's first quarter was $316 million, down more than 71% from $1.1 billion in the same period the previous year.
After those results, King said efficiency "will be a focal point for us," and that in some cases, the company needed to adjust its business model.
Along with adjusting its business model, the company has revamped its executive team, firing poultry president David Bray and bringing company veteran Wes Morris out of retirement to replace him. In the Fresh Meats division, Brady Stewart was hired from Smithfield Foods to replace Shane Miller.
The company in October said it planned to relocate about 1,000 executives from its satellite offices in the Chicago area and South Dakota to Springdale, but the initiative, called OneTyson, was poorly received. About 90% of employees in the Chicago offices declined to relocate, The Wall Street Journal reported. Three-quarters of the workers in South Dakota said they wouldn't make the move, either.
The project was designed to improve collaboration and innovation, the company said. It called for an expansion and renovation of the company’s Springdale headquarters.