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AMID LAYOFFS, CARGILL’S OWNERS GIVEN $2B IN STOCK BUYBACKS AND
SPECIAL DIVIDENDS  
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Brooks Johnson
January 16, 2025
The Minnesota Star Tribune
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_ As 8,000 employees lost their jobs last month in a cost-cutting
reorganization, the Cargill-MacMillan family for the first time since
2019 received profit-sharing payments. _

Shown is Cargill's animal nutrition unit in Little Chute, Wis. The
Minnetonka-based agribusiness rewarded its owners with a special
dividend and share repurchase even as it cut 5% of its global
workforce, (Tribune News Service).

 

As Cargill started laying off thousands of employees last month, the
company’s owners made $2 billion from stock buybacks and one-time
dividends, according to Fitch Ratings.

The Minnetonka-based agribusiness announced in December it would lay
off 5% of its global workforce, or about 8,000 people
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as part of a broader restructuring to counter declining profits. About
475 headquarters jobs were eliminated in Minnesota.

At the same time, the private company’s owners — almost entirely
members of the billionaire Cargill-MacMillan family — received $500
million from a “special” dividend and a rare $1.5 billion share
repurchase completed in December, according to a Fitch Ratings report
issued this week. The company last offered a share buyback and special
dividend in 2019.

The profit-sharing came even as Cargill’s profits dropped 36% to
$2.5 billion in its most recent fiscal year and a majority of the
company’s business units missed profit targets, according to
Bloomberg.

The company has “abundant liquidity” with $6.8 billion in cash and
short-term investments, Fitch reported.

Share buybacks are a common way for companies to reward shareholders
by both returning cash to them and raising the value of the remaining
stock outstanding. Dividends are one of the only ways some
Cargill-MacMillan heirs make money from their ownership stake in the
nation’s largest privately held company.

Cargill’s normal annual dividends have averaged $1 billion over the
past several years, according to Bloomberg.

Cargill officials declined to comment.

Like many ag companies
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Cargill is facing tighter profit margins due to low crop prices, after
hauling in record earnings during the pandemic. Fitch sees more
challenges ahead, with “expanding commodity supplies, renewable
diesel regulatory uncertainties, inflation, weaker global trade flow,
weak U.S. beef fundamentals and tariff risks.”

The company’s earnings before interest, taxes, depreciation and
amortization is expected to be unchanged from last year at around $7
billion, the credit-rating agency estimates.

Cargill launched a restructuring last year as part of a plan to be
“the world’s most consequential food and agriculture company” by
the end of the decade, CEO Brian Sikes told employees.

Beyond reducing its core business units from five to three, the
company has pulled back some of its global presence over the past
year, ending 40 years of tea buying in Kenya and decades of steel
trading in China.

Fitch sees a sunnier long-term outlook for Cargill, as “solid demand
for food, fuel and feed and a relatively balanced but expanding
commodity supply environment will support longer-term healthy profit
generation.” The company’s 2026 profit should be boosted in part
by “efficiency initiatives.”

_Brooks Johnson is a business reporter covering Minnesota’s food
industry, agribusinesses and 3M._

* Cargill
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* agribusiness
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* Layoffs
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