Copyright Star Tribune
Hormel Foods is cutting 250 jobs as the Minnesota food company struggles to find a path to sustainable growth. The company is eliminating corporate and sales staff through a combination of layoffs, voluntary early retirements and closing instead of hiring for open positions. The cuts join a wave of restructuring at other Minnesota-based companies, including Target and Cargill, and add to the creeping chill in the state’s labor market. Austin-based Hormel expects to reinvest savings from the job losses in “critical” areas. “We’re directing resources toward technology, innovation, food safety and quality and the capabilities — including people capabilities — that will shape our future,” Hormel president John Ghingo said in a statement Tuesday. “We’re confident that our ongoing investments will strengthen our brands, improve efficiency and ensure Hormel Foods stays competitive and responsive to the needs of our consumers and customers.” Interim CEO Jeff Ettinger signaled job cuts were on the table this summer after reducing the company’s earnings outlook for the second time this year. Since then, Hormel has encountered more trouble. A fire at a Skippy peanut butter plant, the return of bird flu hitting Jennie-O turkeys, a chicken recall and even worse inflation than expected led the company to trim profit expectations for the fiscal quarter that ended last month. Hormel’s multiyear “transform and modernize” initiative has yet to pull the company out of a post-pandemic profit slump. Earnings on average remain below pre-pandemic levels. Sales growth did start heading in the right direction this summer, however. Investors, who typically reward cost-cutting with a stock bump, might be looking for deeper cuts. They took Hormel’s share price up just a few cents as of Tuesday morning. Year to date, the stock is down 31% and is at its lowest level in more than a decade, which is less than half of its 2022 peak. The Hormel Foundation owns slightly less than half of the company’s shares. Ettinger said the company made the downsizing decision with “care and respect for our team members.“ “Each person who is leaving has contributed to our organization, our culture and our success. We’re grateful for everything they’ve done,” Ettinger said in a statement.
