BusinessWeek shares news about Milwaukee-based Smithfield Foods’ layoff:
Shares of Smithfield Foods Inc. fell on Tuesday along with the broader market, after the nation’s largest pork producer said it would restructure its pork business by shuttering six factories and cutting 1,800 jobs.
The Smithfield, Va.-based company’s shares shed 60 cents, or 6.3 percent, to $8.97 in morning trading.
Before the market opened, the company said it plans to combine seven of its independent operating companies into three main units and focus more on its high-margin packaged meat business.
Smithfield estimates it will save about $55 million in fiscal 2010 and $125 million by the following year, after expenses due to the cuts.
Smithfield’s announcement comes as the industry is recovering from volatile energy and commodity costs that reached record highs over the summer. An oversupply of meat on the market has been keeping prices down, while tight credit markets have hurt the potential for exports, a key market for meat producers. Further, a drop in restaurant spending by consumers has lowered demand.
It’s interesting to hear about how the commodity spike still has bearing on some business’ restructurings. The set of circumstances that Smithfield was operating in sound vicious.
Guess there won’t be as much pork in the meat market anymore.