Leading meat supplier Tyson Foods (NYSE:TSN) is eliminating 15% of its senior leadership roles and 10% of its corporate positions, according to a memo sent to employees. Discussions with most of the affected employees are expected to take place this week.
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A company spokesperson told Reuters that the senior leadership roles being removed are mostly vice presidents and senior vice presidents. Last month, the company announced that it will close two U.S. processing plants with about 1,700 employees. As of the end of Fiscal 2022 (ended October 1, 2022), the company had 124,000 employees in the U.S., including about 118,000 at non-corporate sites.
“We will drive efficiency by focusing on fewer initiatives with greater intensity and removing duplication of work,” CEO Donnie King said in the memo.
Tyson Foods’ layoffs are part of its cost-cutting plans, as its chicken business continues to struggle and profits remain under pressure. In the first quarter of Fiscal 2023, adjusted earnings per share (EPS) plunged 70.4% year-over-year to $0.85, as higher sales were more than offset by operational inefficiencies.
Tyson Foods generated productivity savings of over $700 million in Fiscal 2022. In February, the company stated that it expects to exceed its aggregate $1 billion savings target in Fiscal 2023, a year ahead of its original plan.
The company is scheduled to announce its fiscal second-quarter results on May 8. Analysts expect Q2 FY23 adjusted EPS to decline to $0.75 compared to $2.29 in the prior-year quarter.
What is the Target Price of TSN Stock?
Wall Street has a Hold consensus rating on Tyson stock based on one Buy, six Holds, and two Sells. The average price target of $62.89 suggests 4.2% upside. Shares have declined 3% so far this year.
