Tyson Foods, a leading US meat company, is taking steps to cut costs by closing four domestic chicken plants due to slowing demand and declining profits. The facilities, located in Missouri, Arkansas, and Indiana, are set to cease operations during the first half of the company’s 2024 fiscal year. Tyson expects the closures to result in charges of $300m to $400m. Production will be shifted to other facilities.
When asked about the number of job losses stemming from the decision, Tyson declined to provide specific details. The closures were announced alongside the company’s third-quarter financial results. Tyson reiterated its commitment to operational excellence and cost reduction as it strives for long-term growth.
CEO Donnie King emphasized the company’s vision of delivering sustainable top-line growth and margin improvement. Tyson reported a 3% year-on-year decline in sales for the third quarter, amounting to $13.14bn, while adjusted operating income fell 82% to $179m. These figures included a $448m goodwill impairment charge.
Earlier this year, Tyson had already implemented job cuts and plant closures. In April, the company announced plans to eliminate 15% of senior leadership roles and 10% of corporate roles. In March, two plants in Arkansas and Virginia were closed, affecting over 1,600 jobs.
In addition to these challenges, Tyson is grappling with reduced demand for beef, making it difficult to offset rising costs for labor, grain, and other inputs. Despite these obstacles, the company maintains its fiscal 2023 revenue projection range of $53bn to $54bn.
