Monsanto announced in late May that it was laying off a total of 85 employees in Mississippi and Texas as a result of the plunge in cotton acreage since 2006. And in early June, the St. Louis Business Journal reported that Monsanto planned to cut costs by $400 million this year to offset an expected reduction in that amount in Roundup sales.
“As acreage dropped from 15 million in 2006 to 8.6 this year, it has hampered our manufacturing organization. That’s just the nature of not being able to produce as much seed as we have in the past,” said Janice Person in Monsanto’s Memphis office.
Added Lee Quarles in Monsanto’s St. Louis Office: “We recently implemented a number of cost-saving actions across the company, including a hiring freeze, no overtime, less contractor work and limitations on travel and off-site meetings. Only ‘business critical’ travel will be permitted.”
The drop in Roundup sales is blamed on adverse weather conditions in the U.S., which led to oversupply and price cutting by generic competitors, particularly Chinese makers, Monsanto said.
Fifty-five of the layoffs will come in the Mississippi Delta at Monsanto’s Delta and Pine Land Business Unit facilities in Mississippi in Scott, Hollandale and Indianola. The remaining 30 layoffs will come in Texas and Arizona.
The cuts will be most concentrated in delinting, production planning and warehousing.
“It was tough, whether your job was cut or whether you were next door to someone whose job was cut,” Person said. “But everybody understands the reality of what the reduction in acreage meant.”
Person emphasized, though, that Monsanto remained committed to the future of cotton and would continue to make investments in the seed production industry.
“They will be mainly in Texas, because that’s where the acreage shifts are,” she explained. “But there are some things we are going to do differently in Scott. There is a building under construction now for our research team and Scott will continue to play a critical role in our global cotton breeding programs and will stay there.”
Person said the Texas breeding programs would be pulled together in a “mega-site” in Lubbock.
“We’ll also be adding some testing sites in south Texas,” she said. “I think you can see that we looked at our cotton business as a whole and asked ourselves, ‘What makes sense? Where do we need to be?’”
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